Tesla Is Sinking

Tesla shares were down more than 4% Friday morning.

The company just announced it was receiving $US1.25 billion in incentives, including gargantuan breaks on sales and property taxes, from Nevada to build its lithium-ion gigafactory outside Reno.

On Thursday, CEO Elon Musk told CNBC’s Phli LeBeau that he believes Tesla shares are currently overvalued.

“I do think people sometimes get carried away with our stock,” he said. “I think our stock price is kind of high right now, to be totally honest. Or rather, let me put it to you this way: If you care about the long-term of Tesla, I think the stock is a good price. If you’re looking at the short-term, it’s less clear.”

Shares closed at $US286 Thursday.

Musk is often prone to talking down valuation of Tesla shares, which have climbed 90% in 2014. Last fall he told Bloomberg the then-valuation of $US190 “was more than we deserve.” A few months before that, he told CNBC that he thought investors were being “overly generous” with their valuations.

But as Stifel Nicolaus recently noted, Tesla shares have achieved a kind of immunity from concerns raised by industry analysts about its cars and growth prospects — though to be sure, there haven’t been very many of these in the first place.

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