Doug Kass Doesn't Like Morgan Stanley's Massive Tesla Target Hike
Morgan Stanley analyst Adam Jonas hiked the firm's Tesla Motors Inc (NASDAQ: TSLA) price target from $280 to $465, primarily under the view that the company can play a leading role in the revolution towards shared mobility.
However, Seabreeze Partners Management's founder and president, Doug Kass, is not buying.
The investor challenged Morgan Stanley's move following a secondary offering of Tesla stock last week. Morgan Stanley is one of the six underwriters of the offer.
On Twitter, Kass didn't mince words: "$MS increase in price target from $280 to $465 this AM (after book running $TSLA secondary) ignores the spirit of the law." As an underwriter, Morgan Stanley has the option to purchase an additional 315,000 shares at the price of $238.17 per share. As of Monday morning, with shares up 4 percent on Jonas' note, shares are trading 6 percent above that offering price.
Kass questioned Jonas' conclusion that selling miles is as good as selling cars. He added, "In $MS $TSLA report, miles are the new eyeballs. 100% unadulterated lightweight B.S." Zerohedge also pointed out that Morgan Stanley raised its price target on Tesla the day before a 2014 share offering.
In the past, Kass has been famously short Tesla shares, though he told Benzinga he is not short the stock currently. In an August 6 article for RealMoney Pro, Kass said Tesla's short interest ratio is too high to mess with. "[O]ne of my core tenets in short selling is to avoid high interest shorts," he wrote at the time.
Tesla shares gained 4 percent following the Morgan Stanley note. Year-to-date, shares have gained 13.5 percent against a 6.3 percent gain in the Nasdaq 100 index.
Latest Ratings for TSLA
|Oct 2016||Goldman Sachs||Maintains||Neutral|
|Oct 2016||Goldman Sachs||Downgrades||Buy||Neutral|
|Sep 2016||Cowen & Co.||Initiates Coverage on||Underperform|
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