By James Fattal
Investing.com -- With Tesla shares already down more than a third since their peak in January, 45 percent of UK investors believe that Tesla’s market cap will continue dropping this year, global financial markets platform uk.Investing.com has revealed today in newly released data.
According to the survey of 837 respondents, 27 percent believe Tesla (NASDAQ:TSLA) share values will rise before the end of 2021 to a price close to the January highs, and only 7 percent anticipate a finish to the year that exceeds the stock’s previous peak. Investors’ prognosis is more optimistic in the long run, with 22 percent saying the stock price will land between $1,000 and $2,000 two years from now, followed by 18 percent projecting an $800-$1,000 value and 12 percent a value of $2,000-$3,000.
“The insane run-up in the price of the stock over the last decade is, like all investments, a bet on the future,” said Jesse Cohen, senior analyst at uk.Investing.com. “As such, it helps to be comfortable with roller coasters if you want to buy Tesla stock. That’s because wild up-and-down volatile price swings have become a hallmark of the stock’s performance over the years.”
The survey reveals the sheer influence of Musk, with over 70 percent of investors believing him to be the most influential personality around when it comes to financial markets. Nearly half of respondents agreed that Musk has built up Tesla stock’s price based on “fantasy” as opposed to “revolutionary vision.” Perhaps more telling, however, was that 66 percent of Tesla investors are more loyal to the CEO than to the company itself.
“As one of the leading innovators in the auto industry, Tesla has generated a lot of interest from retail traders in recent years,” Cohen added. “It has developed a loyal cult-like following from fans and enthusiasts who believe in the company’s technology and often laud CEO Elon Musk with praise, devotion and admiration. However, at the same time, the company has many vociferous critics who argue the electric vehicle pioneer could go bankrupt in the years ahead due to its soaring debt and high cash burn.”
Delving into Musk’s recent influence within the cryptocurrency space, the survey asked respondents if the Tesla chief’s manipulation of cryptocurrency values has changed their view of that investment. Fifty-seven percent of respondents agreed that Musk “has too much power” and 34 percent said that cryptocurrencies such as Bitcoin “are too volatile.” Twelve percent don’t believe Musk has too much influence over cryptocurrencies and another 12 percent said his influence makes them “more confident about digital currencies.”
Moving forward, 73 percent of investors expressed support for policies that would reduce the power of big influencers such as Musk when it comes to manipulating financial markets.