Where will Tesla Motors Inc (NASDAQ:TSLA) shares bottom out? The stock is down 27% for the month of September and 38% since its peak at the end of September. During the first nine months of this year, Tesla shares climbed almost six-fold, according to Tomi Kilgore of The Wall Street Journal. But when they approached $200 a share, they seemed to have hit a sort of emotional top barrier investors just couldn’t let them cross.
So now where is the bottom barrier?
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On Tuesday, shares of Tesla Motors Inc (NASDAQ:TSLA) dipped below $120 a share for about an hour before climbing to close at $120.50. In pre-market trading this morning, they continued to play right above the $120 mark.
So does this mean we’ve finally hit that bottom emotional barrier? It’s anyone’s guess. At least one analyst has suggested that $100 could be the bottom emotional barrier, but we’ll have to see whether shares hang out in the $120s for a while.
Analyst Tom Dorsey told The Wall Street Journal that he doesn’t think it is time to sell out of Tesla just yet. He said the automaker’s shares were 100% oversold in the short term, which means he thinks it could start going back up toward its previous highs.
Comparing Tesla to gas cars = apples to oranges
Tesla Motors Inc (NASDAQ:TSLA) has been struggling since the three recent Model S fires. CEO Elon Musk has continued to defend their safety record, saying that fires are much more common in gasoline-powered cars than in the Model S. However, a review from MIT last week called his analysis of the situation into question, explaining that the comparison isn’t really adequate because not all of the fires in the numbers he used were collision fires.
The review basically said it is too early to tell which type of vehicle is safer in terms of a fire in a collision. Musk later spoke with MIT and said that the biggest issue isn’t whether the vehicle catches fire, but rather, if anyone is hurt or if there is serious economic harm. Tesla changed its warranty policy to cover that second one, and we already know that no one was physically hurt in the fiery wrecks.
Musk and the danger of PR
Michelle Quinn of Mercury News posted an interesting article about Tesla Motors Inc (NASDAQ:TSLA)’s crisis management track record so far. She says Elon Musk is indeed an excellent salesperson and marketer and has the charisma which the media loves. However, that charisma can turn against him in situations like these Model S fires, particularly when he lets loose on those attacking the company.
Quinn believes he needs to delegate crisis management, and I would certainly agree with her. He has publicly taken on everyone from George Clooney to The New York Times. Tesla Motors Inc (NASDAQ:TSLA) has even made the National Highway Traffic Safety Administration angry with some of the public comments it has made. According to Quinn, Musk is still learning the rules of public engagement. She thinks he needs to become a little more boring and focus on the business aspect rather than staying in the spotlight so much.
Elon Musk: good and bad for PR
Musk is certainly a PR person’s best dream and worse nightmare all rolled into one. The charisma is a good thing, but when he just fights with everyone over every comment made about Tesla, it becomes bad for the company. Does anyone really care what George Clooney thought of the Tesla Roadster? Not really. He’s a man just like everyone else, and he wasn’t even talking about the Model S, which has gotten rave reviews. Should Musk have battled Clooney publicly? Maybe he should have just let that one go.
If he had delegated crisis management to someone more experienced in this area, then there may have been fewer PR missteps. Let him do what he does best and pop his head out of the shadows once in a while when there’s some big new innovation to reveal. Tesla would probably be a lot better off.
DISCLOSURE: I have no positions in Tesla Motors Inc (NASDAQ:TSLA).