Wedbush Managing Director and Senior Equity Analyst Dan Ives joins Yahoo Finance Live to discuss Tesla's stock woes ever since CEO Elon Musk acquired Twitter.

Video Transcript

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JARED BLIKRE: Tesla shares under a little bit of pressure today as Elon Musk's recent stock sale and his focus on Twitter weighing on the stock. Joining us now to discuss is Wedbush Securities Senior Analyst for Equities Dan Ives. Dan, always great to see you here. Just got to ask you about these stock sales. Anything hinky going on here? Because my understanding is, if you have a corporate executive who's laid out a plan for selling a stock and it's supposed to be arm's length, the timing should not be theoretically suspect, as it is in this case. Maybe you can clue us in on some of the details here.

DAN IVES: Look, I mean, the biggest problem is, Musk is essentially using Tesla as his own ATM machine. And obviously, with the Twitter circus show that continues to get worse, not better, the red ink at Twitter means he's ultimately going to have to sell more stock. And it becomes just a cascading spiderweb situation that's just cast a massive shadow on Tesla because of the antics we're seeing with Twitter and Musk, where, I mean, this is almost a "Twilight Zone" episode that never ends.

DAVE BRIGGS: What has been the impact of his losing his focus? Down 30% shares just since he took over Twitter, down 62% year-to-date, down 14% this week. What has been the impact of the Twitter distraction?

DAN IVES: I mean, look, Musk, it's been a magic carpet ride the last, I'd say, 3 and 1/2, four years. I mean, they're really at the top notches of the EV race. But even from a brand perspective, from a Wall Street view, I think changed dramatically. Now he's essentially gone from a superhero to a villain in the eyes of many investors because of what we see on Twitter and the impact that that's had on Tesla.

It feels like attention continues to be focused on Twitter. And the biggest problem, selling Tesla shares to fund Twitter, and even what we've seen over the last week, it's brand deterioration, a black eye for Musk, which is a black eye for Tesla. And that's part of the problem here. It was always our biggest fear once he bought Twitter.

JARED BLIKRE: Well, Dan, is there anything that Elon can do to quell some of these, maybe get ahead of some of the controversy? Not that he's been historically known for doing exactly that. But it just seems to me like if he were to change his 12b-1 plan-- I believe that's what it's called-- or just acted-- you know, maybe gave investors a heads up, that's another potential solution here. Anything Elon could do to mitigate some of these claims against him?

DAN IVES: Yeah, I mean, you hit the nail on the head. I think first off, he needs, like a lot of CEOs, a defined selling plan in terms of what he's going to sell per quarter. And I think investors need to know that so there's no surprise. Because right now, it's a guessing game. And that actually becomes just fuel for the shorts because you continue to worry about it. And it's been the boy that cried wolf, saying that he's done selling, but yet continues to sell.

Two, you need a CEO of Twitter that's not Musk. I mean, this is not-- this is what I'd say is an untenable situation in terms of him being CEO of Twitter and Tesla. And it comes down to, he could-- I mean, $44 billion, again, it's going to go down, in our opinion. It's probably the most overpaid tech acquisition in the history of deal-making. But it's the impact that it's having on Tesla. So I think he needs separation there. And then, look, in terms of just for Musk, it's attention. You need more and more to focus on Tesla and not just sitting there on Twitter because I think that's been a bad look, and I think it's reflected in the stock.

DAVE BRIGGS: And you still have an outperform and a $250 price target on Tesla. Why?

DAN IVES: I mean, look, it's the fundamental view. I mean, I believe it's one of the most transformational companies over the next five, six years, along with Apple. And that's why it's a fundamental bullish view. But no doubt, I mean, I think the clock struck 12:00 in terms of patience wearing thin. And I think that's what you start to see with a capitulation in Tesla in a risk-off market. And I think it's just really been-- I think for investors, it's really a Ted Striker "Airplane!" moment in terms of the view of Musk now.

JARED BLIKRE: Striker, Striker. I'm looking at that chart of Apple here, and it looks like I got four pretty big red candles in a row here, something that's a little bit unusual for a stock, as Dave was remarking earlier, when there's really not a lot of news out. And it looks like, at least on a technical level, bumping down against that 130 potential support area. Looks like things are getting dicey potentially for Apple. Just wondering how you're viewing this as a securities analyst that you cover.

DAN IVES: Well, I mean, obviously, technicals are dictating some of that now. But everyone knows and we've talked about, I mean, given the supply chain issues in China with the lockdown, they're probably going to come up potentially on the high end 10 million units short, on the low end called 7 million. It's not a demand issue, it's a supply issue. I mean, demand still outweighs supply, I think, 3 to 1, which is bullish.

But I just think right now, in a tech risk-off market, Apple is going to have a bull's eye on their back, especially given what we see with the COVID lockdowns. But we don't view this as the time to panic. I view this as just a way oversold Rock of Gibraltar name that I think is massively higher over the next year. That's why we have a $200 price target.

DAVE BRIGGS: And stepping back to Elon Musk and stepping out of your analyst role for just a minute, I mean, are you concerned about the human being that is Elon Musk that seems to be in these minute to minute overreactions, Twitter memes, banning journalists?

DAN IVES: Look, it's a concern because I think from the beginning, this was always the worry, that if he actually owned Twitter, things like we saw last night and today could ultimately happen. And it goes back to that whole freedom of speech, which actually turned out, you could argue, maybe being the opposite in terms of what we're seeing. And it's about the brand of Musk, brand of Musk associated with the brand of Tesla.

And, look, this is someone that obviously with SpaceX and Tesla, you can never argue with what they've done, historical success. But the double-edged side of Musk, the negative side, is what we see playing out today. And this is no different really than a five-year-old getting into an argument in the playground. But unfortunately, it's on a global platform, and that's the problem.

DAVE BRIGGS: And you have a buy rating on Penn State in the Rose Bowl?

DAN IVES: Oh, yeah, Pasadena bound. I think Penn State by a touchdown over Utah.

DAVE BRIGGS: Underdogs against the Utes. Dan Ives--

DAN IVES: Underdogs.

DAVE BRIGGS: --good to see you, sir. Enjoy the weekend.

DAN IVES: Thanks.