RE: Elon said stock price could get crushed15 Dec 2020 14:40
Yahoo Finance Video
Why one analyst says Tesla investors should expect a ‘significant selloff’
Mon, December 14, 2020, 5:12 PM GMT
GLJ Research Founder and CEO Gordon Johnson joins Yahoo Finance Live to discuss the latest with Tesla and what to expect ahead of the company joining the S&P 500.
Video Transcript
ZACK GUZMAN: I want to spotlight the action we're seeing here in Tesla, with shares in the green following an interesting report on plans for the Model S and X at the electric automaker. Tesla planning to idle production for those models through January 11th according to an email for the plans obtained by CNBC. It's an interesting production pause considering those models are not exactly the most popular. They are only about 11% in terms of deliveries in the latest quarter. And a new report out from electric saying, part of the reason could be that the automaker has already met its goals for Model S and X deliveries for the fourth quarter. Interesting there. Could be driving the price action we're seeing here today.
For more on that, I want to bring on our next guest. That would be Gordon Johnson, GLJ Research CEO and founder here with us. Gordon, appreciate you taking the time here to chat. I mean, it's obvious that Tesla has been focusing more on the cheaper Model 3 here, that's the main driver, of course, the main shift kind of ahead of the incredible rally we've seen here this year. But what do you make of that, and how important is it for Tesla and Elon Musk when we talk about the Model S and X?
GORDON JOHNSON: Well I think it's baffling some people, because just a few days ago Elon Musk put out an email-- an internal email that was leaked to the public-- that said they were effectively production constrained. They needed to significantly increase production. And then a few days later we find out they're shutting down production for S and X for 18 days.
Look, I think it's one of two things. One-- one of two things. One being-- A being, rather, demand is a problem. Or B being, rather, they need to retool or refurbish the Model to make it more attractive. Either way it's a demand problem and kind of stands in contrast to what Elon Musk said it's just a few days ago, i.e. that they were production constrained.
AKIKO FUJITA: So which do you think it is?
GORDON JOHNSON: I think it's probably a combination of both. We know those models haven't sold well, so I think that's a problem for them. But I think there's other issues that we can get into, a couple of actions Tesla has taken recently that suggest demand is really a problem.
ZACK GUZMAN: What might those be, though? Because when we we're talking about a stock that's up so much there this year, people have been talking about the idea that demand has been strong considering, you know, the delivery targets being shattered quarter after quarter for Elon Musk and Co. I mean, it seems like things are moving in the right direction, but I know there are other critics out