Tesla Inc.’s TSLA third-quarter delivery shortfall early in October raised concerns about demand that led to a sell-off in shares.
What Happened: Future Fund’s Gary Black took to Twitter on Sunday to offer his take on whether the worries are well founded. While Tesla uber-bulls blamed the shortfall on logistics issues, the reason for the miss was demand drying up in China at the end of the third quarter, the fund manager said. Chinese buyers were apparently waiting for a price cut that never materialized, he said.
Deliveries in the fourth quarter may be under pressure if Chinese consumers continue to put off purchases until there is a price cut, according to Black. Secondly, demand for Tesla’s cars in the U.S. could stagnate if the management doesn’t address the $7,500 electric vehicle credit, effective Jan. 1, by offering to take deliveries in the fourth quarter.
According to the analyst, the events of the last two weeks indicate that there will be additional pressure until the management resolves these two issues, and the deal-related uncertainty surrounding Twitter Inc. TWTR subsides.
Why It’s Important: Tesla bulls have an opportunity not seen since March 2020 to buy the shares cheap before the Twitter overhang lifts, first-quarter volume soars, Cybertruck launches and the Fed pivots, Black said.
“Growth stocks will return to favor, and those who bought TSLA at today’s depressed price will likely profit,” he added.
Price Action: Tesla closed Friday’s session down 6.32% at $223.07, according to Benzinga Pro data. The stock has thus far shed about 37% year-to-date.
Read Next: How To Invest In Tesla Stock