Tesla (TSLA) shares are sinking more than 4% in premarket trading after Wedbush Securities analyst Daniel Ives warned that he has "major concerns" about CEO Elon Musk and the company.
Here's what Ives said in a new note:
We continue to have major concerns around the trajectory of Tesla's growth prospects and underlying demand on Model 3 in the US over the coming quarters which is putting more heat in the kitchen on Musk & Tesla to rein in expenses at an accelerated rate with profitability targets in [the second half of 2019] a Kilimanjaro-like uphill climb, in our opinion.
He said that Tesla is "facing a quagmire" because it's doing several things at once, such as building a new factory in China, developing the next Model Y and continuing to ramp up production of the Model 3, all while "facing a growing cash crunch and high expense structure issue."
He lowered the stock's price target from $275 per share to $230 because of "reduced confidence in the company's ability to hit its 2019 unit demand guidance."
Tesla closed at $211.03 per share on Friday. The stock is down 37% for the year.