Tesla Stock Is the Reason the ‘Stock Market Bubble Implodes’, Says Ralph Nader

On Jan 24, 2020 at 4:19 pm UTC by Tolu Ajiboye · 3 min read
Tesla Stock Is the Reason the ‘Stock Market Bubble Implodes’, Says Ralph Nader
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Though today there are a lot of Tesla fans, consumer advocate and activist Ralph Nader believes that the recent Tesla stock price surge may cause a crash in the market.

Tesla stock has made a lot of headlines recently. Former presidential candidate and political activist Ralph Nader is not as pumped about Tesla as the rest of the market. In fact, Nader believes that Tesla is the spark that will burn the stock market, leveling it to ashes. On Wednesday, Nader took to Twitter to warn the general public about Tesla’s recent surge, suggesting that it’s unsustainable.

Ralph Nader Predicts Tesla Spells Doom

In a tweet on the 22nd of January, Nader said:

“When the stock market bubble implodes, it will have been started by the surge in Tesla shares beyond speculative zeal…”

Nader shares the opinion of a few Tesla bears who believe that Tesla’s recent surge is a little too sudden and should be carefully monitored for the possibility of a crash. In a subsequent tweet, Nader continues his explanation about why he thinks there will be an implosion.

“[Tesla] is deep in debt, [sold] less than 400,000 vehicles last year, and [is] challenged by several competing electric car models in 2020.”

Ralph Nader Draws Attention to Tesla Valuation

Ralph Nader’s comments are coming as Tesla stock (TSLA) recently surged, pushing the company’s valuation over $100 billion. At the moment, TSLA is trading above $566 with a market cap of more than $103 billion. Tesla is now the world’s second most valuable car company, displacing Volkswagen (VW), which is less than $100 billion.

Nader further compares both companies in their sales, explaining why Tesla’s current status is not dependable.

“Tesla’s stock valuation stunningly exceeds VW which sold over 10 million vehicles last year. Watch out Tesla believers.”

Tesla Soars Despite Sell Rating

An analyst with Swiss UBS Group AG Patrick Hummel believes that shareholders should dispose of their positions. Hummel is giving this advice even though he more than doubled his TSLA price target from $160 all the way to $410. This new price target is almost 30% lower than TSLA’s trading price at the time. Regardless, Hummel confirms his “Sell” rating. According to him, “shares are over-shooting right now.”

Hummel further states that some of Tesla’s plans include a lot of heavy risks that call its execution into question. Furthermore, the United States’ decision to remove some tax allowances on electric cars might cause problems for the company, according to the analyst.

Exane BNP Paribas has also joined UBS in its bearish outlook for Tesla. The company earlier put TSLA’s rating as “Outperform” but has now shifted it to “Neutral”.

The Future for Tesla

On the other hand, it’s worth noting that Tesla’s presence in China will be advantageous for the company. The public has praised the speed with which the factory was set up and how it is already delivering made-in-China vehicles.

Plans for Tesla’s European gigafactory are also moving forward very quickly. The company has already begun sweeping the large area for buried explosives before erection begins.

Markets, News, Stocks
Tolu Ajiboye
Author: Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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