Tesla's volatility could be costing it millions in lost investments, an analyst warns (TSLA)

Elon Musk

As Toyota invests in Uber and other self-driving-vehicle startups, one analyst is worried Tesla could get left behind.
"We are left wondering if Tesla should have been in the mix for those investments; the company's volatile image could also leave it out of the discussion for future investments," Canaccord Genuity told clients Tuesday.
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Tesla CEO Elon Musk is worried about traditional, carbon-burning automakers having an outsize stake in Tesla, having rejected Volkswagen's offer to invest in a go-private buyout, according to The Wall Street Journal.

Now one Wall Street analyst is worried this aversion could be costing Tesla, especially as other upstarts partner with old-guard automakers to gain a leg up.

"Investments in autonomous vehicles continue to grow," Jed Dorsheimer, an analyst at Canaccord Genuity, told clients Tuesday.

"Toyota recently announced a $500 million investment in Uber in an effort to develop driverless vehicles. It also announced a $1B investment in Grab (Southeast Asia's Uber equivalent) earlier in June. Although details were not disclosed, we are left wondering if Tesla should have been in the mix for those investments; the company's volatile image could also leave it out of the discussion for future investments in autonomous driving capabilities."

Dorsheimer has slashed his price target for Tesla shares to $316 — roughly in line with Tuesday's opening price — from $336 following Musk's failed bid to take the company private. Specifically, he's worried about the $230 million and $920 million of corporate debt due in November and March.

"Tesla will need to secure profitability by the end of the year to maintain solvency," Dorsheimer wrote. With Tesla's second-quarter earnings report indicating the company had only $2.2 billion of cash on hand, he estimates Tesla "only has enough cash to maintain operations for another six to nine months at its current rate."

Shares of Tesla fell about 1.1% in trading Monday, their first trading day since Musk announced late Friday that he was scrapping his go-private bid, citing feedback from both institutional and retail investors. The 16-day saga — that has now involved an investigation by regulators and multiple lawsuits — has left many Wall Street analyst scratching their heads.

Now, all focus comes back to Tesla's balance sheet and its struggle to become profitable.

Analysts polled by Bloomberg have an average price target of $328 for the stock — about 3.4% above where shares were set to open Tuesday.