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Elon Musk's days as CEO of three high-profile corporations may quickly be over, investor Dan Nathan mentioned.
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Nathan pointed to Musk's mountain of debt from his Twitter takeover, in addition to pressures going through Tesla.
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“He is likely to be coming into the tip sport right here a bit bit for being the CEO for all these corporations,” Nathan mentioned.
Elon Musk's time operating Tesla, Twitter, and SpaceX may quickly be over, in line with investor Dan Nathan.
That is as a result of the tech mogul and world's second-richest individual is going through mounting pressures on Tesla inventory that would pressure him to confront some harsh realities about juggling his different capital intensive and extremely levered aspect companies.
In an in interview with CNBC on Thursday, Nathan pointed to the mountain of debt Musk used to fund his Twitter buy, buying the social media firm for $44 billion final 12 months with a mix of financial institution financing and money raised from promoting Tesla inventory all through the course of 2022.
However Twitter may only worth half the amount Musk purchased it for. Twitter's funds and the overall chaos of Musk's takeover of the corporate have damaged Musk's reputation, analysts say, and it may value Musk his CEO function at a few of these corporations, Nathan warned.
“He is obtained all these banks on the hook for this debt that he cannot service based mostly on Twitter's companies, so to me, he is likely to be coming into the tip sport right here a bit bit for being the CEO of all these corporations and being that levered,” he mentioned.
Tesla inventory has rocketed larger in 2023 after a horrible efficiency final 12 months. The inventory this 12 months to date has gained 33%, however that is truly down significantly from earlier year-to-date positive factors of as a lot as 70% — and Nathan sees a lot steeper losses forward for the inventory, which he described as “damaged.”
He forecasted shares may quickly dip under $100 every, although his final worth goal is $69 a share, implying a draw back of 58% from Friday's closing worth of $163.58.
“The basics have shifted. Not a single analyst on the Road has downgraded this inventory,” he mentioned, referring to Wall Road's response following Tesla reporting lower profit margins as a result of its worth cuts on key fashions.
“They are going to be downgrading this inventory decrease, I am simply telling you that individuals, over the following three to 6 months or so. And that is when you might have a scenario the place, who is aware of if he will be in charge of this firm within the not-so-distant future?”
He went on to quote demand points going through Tesla, significantly from China, that are weighing on key metrics for the EV maker's enterprise.
“Earnings estimates are coming down, margin estimates are coming down, supply estimates are coming down, backlog is coming down, and stock goes up. Does that sound like a superb elementary scenario?”
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