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Doug Kass Doesn't Like Morgan Stanley's Massive Tesla Target Hike

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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

DateFirmActionFromTo
Apr 2021MizuhoMaintainsBuy
Apr 2021Canaccord GenuityUpgradesHoldBuy
Apr 2021JP MorganMaintainsUnderweight

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

 

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