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Analysts tell Tesla investors to get ready.
“If you buy or own Tesla stock, be prepared for a crazy run up,” Autotrader analyst Michelle Krebs told CNNMoney.
The U.S. Securities and Exchange Commission on Thursday sued Elon Musk, saying he made “false and misleading” statements to investors in an Aug. 7 tweet that he had received funding to take action. Tesla (Tesla) The private placement price is $420 per share. The Securities and Exchange Commission claimed he was not secured funds.
Tesla shares fell 12% to $270 per share on Friday.
The company’s future “now lies with the board, and it remains to be seen what happens next,” Cowen analyst Jeff Osborne wrote in a note. The company lowered its price target on Tesla to $200 per share.
Osborne estimated that Tesla would need to raise $2 billion in the fourth quarter to avoid bankruptcy in 2019. Osborne said that will be a bigger challenge as Musk’s future is in question.
The company accused Tesla of being a company that “always overpromises and underdelivers.”
Barclays analyst Brian Johnson said there is a $130 “Musk premium” on Tesla shares that could disappear if he leaves. Johnson wrote in a note to clients titled “Lawsuit Approved” that if a judge forces Musk to step down, investors will “refocus on Tesla’s value as a niche automaker rather than its founders.” Human-led disruptors with the potential to disrupt multiple industries.” .
Citigroup downgraded Tesla stock to a “sell” rating. It lowered its price target on Tesla to $225.
CNN Business (New York) First published September 28, 2018: 9:48am ET