Summary
⚈ Analyst Gordon Johnson raised concerns of market manipulation, citing suspicious options activity and calling for an SEC investigation
⚈ Investor sentiment rebounded after Elon Musk announced a more active role at Tesla, though leadership concerns and political controversies continue to stir debate
Tesla’s (NASDAQ: TSLA) stock price has surged in defiance of disappointing Q1 earnings, prompting a Wall Street analyst to suggest the rally may be driven by market manipulation.
After a few weeks of struggling, partly due to backlash against CEO Elon Musk for his political views, TSLA resumed upward momentum shortly after the Q1 2024 earnings call.
During the quarter, Tesla reported revenues of $19.34 billion, against an estimated $21.11 billion, while automotive revenue dropped 20% to $14 billion from $17.4 billion in the same period last year.
Despite these setbacks, Tesla’s stock has climbed more than 25% since the earnings release.
As of the close of the last session, TSLA stock was trading at $287.21, up 2.38%. Over the past month, the equity has rallied more than 7%.
Tesla stock manipulation claims
Now, Gordon Johnson, a known Tesla bear, pointed to the stock’s unexpected rally as evidence of suspicious activity, calling for an investigation by the Securities and Exchange Commission (SEC), he said in an X post on May 3.
Johnson expressed disbelief at the rally, comparing the electric vehicle (EV) manufacturer’s performance to that of Nvidia (NASDAQ: NVDA) and suggesting that a similar miss by the chipmaker would likely trigger a 50% single-day drop.
“With the horrible Q1 earnings print, and the stock going straight up thereafter, it’s pretty clear, at this point, the stock is being manipulated somehow,” Johnson said.
He speculated that options trading tactics, specifically a “gamma squeeze”, could be artificially inflating Tesla’s share price.
Musk’s return to Tesla
The rally coincides with renewed investor optimism following Musk’s announcement of his return to a more active role at Tesla.
Musk, who had been splitting his focus across multiple ventures, including a recent, controversial role in the Donald Trump administration under the Department of Government Efficiency, is coming back at a time when the company is doubling down on its push into autonomous driving and expanding its Full Self-Driving (FSD) technology.
This announcement has been well received by other Wall Street analysts, such as Dan Ives, who remains bullish on the EV maker.
Notably, Tesla could face more headwinds, as a recent report suggested that the company’s board has begun a search for a new leader due to concerns over Musk’s role in Trump’s government. To this end, Ives has dismissed the potential leadership drama.
“We believe Musk is back in the drivers seat at Tesla and it shows just how tense the situation got between the Board and Musk..in line with our thoughts over the past month,” Ives said.
Meanwhile, a consensus of Wall Street analysts on TipRanks foresees a TSLA downturn over the next 12 months. The 36 experts have set an average price target of $283, implying a downside of 1.23% from the current valuation.
Featured image via Shutterstock
