Tesla is dropped from Wedbush's Best Ideas List due to Twitter overhang

Scott Olson

Wedbush Securities scratched Tesla (NASDAQ:TSLA) off its Best Ideas List even as it stayed constructive on the electric vehicle stock for the long term.

Analyst Dan Ives and team said their near-term view of the name is increasingly becoming more challenged.

"This is a very nervous few months ahead for Tesla investors as they remain the ones that have been punched again and again by the Musk Twitter antics and the stock now is deep in the investor penalty box until deliveries hit in early January and we get a better sense of the 2023 delivery/production trajectory."

The view is that Elon Musk has essentially tarnished the Tesla story/stock and is starting to potentially impact the Tesla brand with what the firm called an ongoing Twitter train wreck disaster.

Looking ahead, the worry is that the Twitter "Money Pit" situation will never end and continue to take up money, time, and attention from Musk.

After weighing the Twitter situation, Wedbush Securities maintained an Outperform rating on TSLA, but dropped the price target to $250 from $300 to reflect a lower multiple associated with the Musk overhang that gets worse by the day.

Shares of Tesla are down 20.91% over the last month and have peeled off 55.59% for the year amid a broad sell-off in EV and tech stocks.

The Seeking Alpha Quant Rating on Tesla (TSLA) is still flashing Hold with low grades for valuation and momentum holding it back.