Analyst Conflict of Interest in Predicting Tesla Stock Price

(p. A1) Just like the Internet stocks of yore, Tesla has its own Wall Street cheerleader: Adam Jonas, Morgan Stanley’s auto analyst. Jonas could not be less interested in mundane factors like earnings per share; indeed, he has had to lower his 2015 earnings estimates several times; he now predicts the company will lose $2.70 a share. But never mind: In the future that he envisions, Tesla will be the most important car company on earth.
Just a few weeks ago, in fact, Jonas raised his share price target for Tesla from $280 to $465, which would make Tesla more valuable than General Motors or Ford. Had anything fundamental changed for Tesla? Of course not!
Jonas based his new target on something he labeled Tesla Mobility, which he describes as “an app based, on-demand mobility service.” Where did he learn about Tesla Mobility? Who knows? Tesla, a company hardly averse to hype, has never acknowledged its existence.
And that’s not the worst of it. No, the worst is the timing of his call. It came days after Tesla announced that it would be issuing stock to raise yet more money — and that Morgan Stanley was among the underwriters. (The company raised close to $800 million.)

For the full commentary, see:
Joe Nocera. “The Tesla Cheerleader.” The New York Times (Sat., AUG. 29, 2015): A1 & A19.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date AUG. 28, 2015.)

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