NEW YORK— Tesla Motors (TSLA) stock tanked on Tuesday after a scathing report from Goldman analyst Patrick Armchambault, who said he’s wanted to “sock it to Tesla” for several years.
Tesla shares, which have been on a tear this year, were trading at year-highs of near $130 per share when Goldman Sachs released its report, which gave Tesla a price target of $84. Armchambault told investors he’s no longer considering Tesla a growth stock and called the shares “overvalued.” The selloff that followed pushed Tesla shares down 14%, although it has since regained ground on other analysts’ positive reports.
“Goldman Sachs has big titanium balls, I’ll tell you that much,” said one analyst at Jefferies, who chose to remain anonymous citing a deep-seated fear of incurring Goldman’s wrath.
Armchambault said the stock’s success this year was “just getting too much attention” and claimed Tesla CEO and founder Elon Musk, who invested a substantial portion of his personal assets into the company, was just “so smug and cocky.”
“We officially attributed the downgrade to rising interest rates, but get serious,” Armchambault said. “All these auto industry CEOs need an ego check. Remember that time they flew to Washington on corporate jets to talk about bailouts? Well, that still rubs me the wrong way. Call it a grudge, call it what you will.”
Musk said he’s indeed taking Goldman’s report personally. He said he’s known Goldman Sachs, which also downgraded the entire auto industry to “Neutral” on Tuesday, has had his number for some time.
“What’s a guy gotta do to avoid a scathing review from Goldman?” said Musk, who also founded SpaceX, the first private space company, and PayPal. “I created a successful rocket company for Christ sakes. And Goldman seriously thinks I can’t build a little car business? … And, hello! We’ve been over $84 all quarter. Welcome to three months ago, Goldman.”
But since Goldman’s review, other firms like Dougherty & Co. are hustling to offer more glowing reviews to show they have absolutely no beef with Musk. Dougherty more than doubled its price target to $200, with analyst Andrea James saying Tesla stock could easily reach $4,000 by the end of the year. As a result, Tesla’s stock has rebounded from Tuesday’s losses.
“I never want to start a Cold War with Tesla,” James said. “What was Goldman Sachs thinking?”