Tesla 'No Longer Investable' Due To Elon Musk's Antics, Per Analyst

Tesla took another hit on Tuesday, after Nomura Instinet lowered its rating on Tesla (TSLA) shares from buy to neutral. CNBC reports that analyst Romit Shah has changed his views of Tesla due to Elon Musk's unpredictable behavior.

As previously reported by Inquisitr, Musk appeared last week on a live podcast with host Joe Rogan. During the podcast, Musk smoked weed on video. The next day two mid-level executives resigned from Tesla, Human Resources chief Gaby Toledano and chief accounting officer Dave Morton. Shares dropped as much as 9 percent on Friday before leveling off to close at $263.24 a share, down 6.30 percent.

The weed-smoking incident was just the latest in a series of actions by Musk that have rattled investors. On August 7, Musk tweeted that he would take the company private at $420 a share. This claim shocked the investment community, and resulted in lawsuits by investors. Inquisitr also reported that Tesla took another dip in share value after a bombshell interview by Musk with the New York Times, which raised concerns about his health and job stress.

On Tuesday, Tesla shares dropped 2.1 percent in early trading after the downgrade from Nomura Instinet. In a note to clients, Shah described the company as "No Longer Investable."

"We have been one of the most bullish on TSLA shares since initiating coverage last October. … We continue to believe that Tesla could be a lot bigger than it is today. The issue though is the erratic behavior of CEO Elon Musk. During the second quarter, the switch seemingly flipped. … We are worried that this behavior is tainting the Tesla brand, which in terms of value is most important."
Shah said Musk's behavior on Twitter was a concern, as the CEO went from tweeting four times a day before May of this year, up to 15 times per day on average.
In his note, Shah goes on to describe the recent string of behaviors that has called Musk and Tesla into question, including "taunting short sellers, NY Times interview, cave diver accusation, earnings call outburst, Joe Rogan podcast." The analyst said that Tesla is in need of "better leadership (an about face)" and is waiting to see what will happen with the company's management.

CBS News reports that last week, another prominent Tesla backer has questioned Musk's ability to lead the company. Last week venture capitalist Gene Munster stated that Musk's behavior is "making it harder and harder to support Tesla as a company."