Tesla Stock Could Halve: Barclays

Tesla Inc. (TSLA) stock could lose its "Musk premium" if the Securities and Exchange Commission (SEC) prevails in its quest to remove its founder and Chief Executive Officer (CEO) from his leadership position at the electric vehicle (EV) maker, according to one team of analysts on the Street. 

In a note to clients on Friday, Barclays' Brian Johnson warned that shares of the Palo Alto, Calif-based auto company could fall by $130, or about half of the stock's value if Musk is forced to leave, as reported by Bloomberg

(For more, see also: Tesla Is Too Risky to Own: Citi.)

Risk Founder-Led Disruptor Status

On Thursday, the SEC sued the serial entrepreneur and engineer for "false and misleading" statements associated with a series of tweets in which Musk suggested that Tesla was weighing a take private acquisition when the share price hit $420. Musk has called the SEC's complaint "unjustified" and "deeply saddening," arguing that he has always acted in the" best interest of truth, transparency and investors." 

"The SEC civil action may lead to Musk's exit from Tesla (either permanently or temporarily) and the Musk premium in the shares dissipating," wrote Johnson. In the case of Musk's departure, Tesla would no longer be viewed as a "founder-led likely disruptor of multiple industries," and just like any other niche automaker, he stated. 

Johnson, who rates Tesla shares at the equivalent of sell, has a price target of $210, implying a 22.5% downside from Friday afternoon. Trading down 11.8% at $271.13, Tesla stock reflects a near 13% loss year-to-date (YTD) compared to the S&P 500's 9.1% return over the same period. 

Investors should expect more movement for Tesla's highly volatile stock this upcoming week as the firm is expected to announce its third-quarter delivery figures. Musk's skeptics doubt the EV maker's ability to sustain production of its first mass-market vehicle, the Model 3 sedan, viewed as vital for the automaker as it pushes into the mass market and competes against a growing number of rivals. Meanwhile, Musk has pledged that his company is on track to meet targets and reach profitability without raising additional capital. 

(See also: 5 Takeaways From the SEC's Complaint Against Musk.)

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