Shares of Tesla Inc. TSLA, -2.12% sank 2.4% in premarket trade Tuesday, after the electric car maker was downgraded by one of its previously most bullish analysts, who cited the "erratic behavior" of Chief Executive Elon Musk. Analyst Romit Shah cut his rating to neutral after starting coverage with a buy rating in October 2017, and slashed his stock price target by 25% to $300 from $400. Shah said he continues to believe Tesla is positioned to deliver "unprecedented revenue growth" for a multi-billion company and accrue substantial profits, being the only vertically integrated supplier in the electric vehicle value chain. "The issue though is the erratic behavior of CEO Elon Musk," Shah wrote in a note to clients. "During the second quarter, the switch seemingly flipped." He said this is evidenced by the number of tweets, which has increased to 15 per day since May, from 4 per day the prior 18 months. "Mr. Musk's behavior is well documented (taunting short sellers, NY Times interview, cave diver accusation, earnings call outburst, Joe Rogan podcast) and likely contributed to the onslaught of executive departures in recent months," Shah wrote. The stock has slumped 14% over the past three months, while the S&P 500 SPX, +0.37% has gained 3.4%.
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