Tesla shares bounce as Musk risk seen as overblown

NEW YORK (AFP) – Tesla shares bounced on Monday following an upbeat analyst note that suggested worries about chief executive Elon Musk and his various controversies were exaggerated.

Alliance Bernstein analyst Toni Sacconaghi Jr said much of the pressure on Tesla shares over the last month has been due to the sense Musk is “running wild and can’t be contained” following a patch of erratic behaviour, including a podcast appearance on Thursday night in which he consumed recreational drugs.

“Musk is not your typical CEO,” Sacconaghi wrote. “As long as he doesn’t self-destruct, we think this is the reality (show) of being a Tesla investor.”

But, he said, “if Elon and the Board wisely choose to add an executive/’adult in the room’ and manage to restrict his twitter/public commentary, it would likely be viewed positively.”

Near 1915 GMT, Tesla shares were up 6.5 per cent to USD280.22, recovering from Friday’s selloff prompted by the news of two executive departures and criticism of Musk’s podcast appearance.