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Tesla Motors Inc (TSLA) CEO Elon Musk’s Comments on Stock Were Perfect: Analyst

Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk was criticized in some corners today for his comments last night concerning the current valuation of his company, saying during an interview that he felt the stock was “kind of high right now”, though he did add the caveat that he felt the price was right if one was looking long term.

Tesla Earnings Call Transcript 2014 Q1

For his part, Henry Blodget, the editor-in-chief and CEO of Business Insider felt Musk’s comments were right on the mark themselves, and may even be necessary to stabilizing the stock. He discussed those comments on CNBC today.

“The way he handled it is perfect. He drew the ‘long term you’re going to be fine’, he didn’t say ‘run for the exits, this is an all-time peak’, or anything like that, and yet he’s tamping it down and that’s helpful. They don’t want it to spike just to insane heights, because then it screws up to the extent that they have options, and all that, it screws up that piece so…he wants a more stable stock price,” Blodget said.

As CNBC analyst Kayla Tausche later theorized, it’s possible Musk was doing more than just playing Devil’s Advocate, but was in fact hinting that the heightened expectations of future production capacity for Tesla Motors Inc (NASDAQ:TSLA) were being a little overblown and that analysts were truly getting a little ahead of themselves with projections.

It’s impossible to tell what long term effect the comments will have on stabilizing the stock, but they certainly had a dramatic effect today. Tesla Motors Inc (NASDAQ:TSLA) fell $8.65 today, a loss of 3.02%, its largest single day loss since its most recent bottoming out on May 8, a day the stock lost nearly $23 to fall more than 10% to $178. The stock had regained those losses within two weeks.

Tesla Motors Inc (NASDAQ:TSLA)’s stock has been on a fairly steady climb since then, which was the lowest level it had reached in three months. In the four months since then the stock had gained nearly $110 to enter today at $286, a 60% gain.

Disclosure: none

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