Tesla goes from the history of growth to the history of distressed credit, says Morgan Stanley

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Tesla entered a dangerous phase in its relatively short life, passing from a society that many believed had a large potential for long-term growth to a history of "credit in crisis and restructuring," according to an influential Wall Street analyst.

Morgan Stanley equity analyst Adam Jonas, a long-time Tesla bull who grew up more and more bearish, discussed concerns about the company during an investor interview that lasted nearly an hour and was recorded and disclosed online Wednesday. Among the reported problems, there are signs of decreasing demand for Tesla electric cars, sales in China may not be as robust as expected and next model Y crossover is not sufficiently convincing, along with persistent concerns about costs and debt.

As late as late 2018, "Tesla was considered a growth story," Jonas said at the call. "Today, supply exceeds demand, it burns money Nobody cares about Model Y. … Tesla is not seen as a growth story, at least by the feedback we received, which is rather one-sided … it's seen more as a distressed credit story and a restructuring story. "

The leaked comments follow a research note this week in which Jonah slashed his "most unfavorable" price of Tesla shares at only 10 dollars, which could be caused by factors such as estimated missing sales targets for China of up to 50%. Shares plunged 6% in Nasdaq on Wednesday to $ 192.73, their lowest level since December 2016. Tesla is down 42% this year.

The company did not immediately respond to a request for comment on the subject. Jonah's comments were reported earlier by Internal business. & nbsp;

You're here fell back into the red in the first quarter, penalized by deliveries of models S, X and 3 electric cars lower than forecast. And although he has been in a difficult situation in the past, particularly at the end of 2008, when the recession and the financial market crash almost made him disappear, CEO Elon Musk has generally maintained investors' patience against the constant annual losses of Tesla's nine years as a public company.

Vehicle sales "have dropped almost a third sequentially from the 4th quarter to the 19th quarter, and if you annualize the 1st quarter results, you get about 250,000 units," said Jonas. "This represents more than 100,000 units below the bottom end of the company's 360,000 to 400,000 deliveries this year."

And while Tesla claimed to target between 90,000 and 100,000 units in the second quarter, the "whispered" figure "appears to be in the 70,000 or even between 70,000 and 70,000," he said.

Jonah's tough prospects also come right after Tesla raised $ 2.7 billion this month in its latest offering of debt and equity securities. Curiously, Morgan Stanley was among the investment banks involved in the sale of these offers.

In his discussion, Jonas noted that Tesla had missed out on an opportunity to raise funds late last year, while his finances seemed briefly stronger. "We thought that they would mobilize capital, but felt that it was very likely that there would be strategic involvement, some to fill the board of directors, provide a know-how and a vision in addition to Tesla's vision. "

Instead, "they mobilize capital at a level close to the lowest, without any strategic membership," he said. "Everything was institutional".

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Tesla entered a dangerous phase in its relatively short life, passing from a society that many believed had a large potential for long-term growth to a history of "credit in crisis and restructuring," according to an influential Wall Street analyst.

Adam Jonas, Equity Analyst at Morgan Stanley, has long been an increasingly bullish Tesla bull. He raised concerns about the company during a nearly one-hour conversation with investors that was recorded and released on Wednesday. Among the reported problems, there are signs of decline in demand for Tesla electric cars, sales in China may not be as strong as hoped, and the next crossover Model Y is not convincing enough, as the persistent concerns over costs and debt.

As late as late 2018, "Tesla was considered a growth story," Jonas said at the call. "Today, supply exceeds demand, it burns money Nobody cares about Model Y. … Tesla is not seen as a growth story, at least by the feedback we received, which is rather one-sided … it's seen more as a distressed credit story and a restructuring story. "

The leaked comments follow a research note published this week in which Jonas reduced the "worst case" price of its $ 10 Tesla shares, which could be caused by factors such as estimated sales targets. not achieved up to 50%. . Shares plunged 6% in Nasdaq on Wednesday to $ 192.73, their lowest level since December 2016. Tesla is down 42% this year.

The company did not immediately respond to a request for comment on the subject. Jonas's comments have been previously reported by BusinessInsider.

Tesla fell into the red in the first quarter, penalized by deliveries lower than the forecasts of electric cars models S, X and 3. And although it has been in a difficult situation in the past, especially at the end of 2008, When the recession and the crash of the financial markets almost completely dissipated it, the CEO Elon Musk generally maintained the patience of the investors with the constant annual losses of his nine consecutive years. public company.

Vehicle sales "have dropped almost a third sequentially from the 4th quarter to the 19th quarter, and if you annualize the 1st quarter results, you get about 250,000 units," said Jonas. "This represents more than 100,000 units below the bottom end of the company's 360,000 to 400,000 deliveries this year."

And while Tesla claimed to target between 90,000 and 100,000 units in the second quarter, the "whispered" figure "appears to be in the 70,000 or even between 70,000 and 70,000," he said.

Jonas' tough outlook also comes just after Tesla raised $ 2.7 billion this month on its latest equity and debt investment. Curiously, Morgan Stanley was among the investment banks involved in the sale of these offers.

In his discussion, Jonas noted that Tesla had missed out on an opportunity to raise funds late last year, while his finances seemed briefly stronger. "We thought that they would mobilize capital, but felt that it was very likely that there would be strategic involvement, some to fill the board of directors, provide a know-how and a vision in addition to Tesla's vision. "

Instead, "they mobilize capital at a level close to the lowest, without any strategic membership," he said. "Everything was institutional".