Tesla Shares Sink after Losing Morgan Stanley’s Rating Cut

Morgan Stanley, one of Tesla's biggest and longtime bulls, downgraded the stock as it cited the increased projection of the carmakers' expenses and the competitive risk from well-capitalized rivals.

Morgan Stanley analyst Adam Jonas, has been one of the biggest champion for the Tesla stock, visualizing offerings of a ride-for-hire service that could increase the value of the firm by two-fold. But now, the top auto analyst sees operating losses extending into the next year and project the company will burn through $3.1 billion of cash this 2017, up from the prior estimate of $2.3 billion.

In a note to clients, Jonas stated they expect Tesla's larger and better capitalized rivals to launch strategies that will tackle sustainable transportation and movability.

Jonas slashed Tesla's rating to “equalweight” from “overweight” but retained his $305 stock price target, causing its shares to fall by as much as 3.8 percent to $312.53. It was last trading down 2.6 percent to $316.46. With the downgrade, the electric carmaker's bull camp fell to just 37.5 percent of Wall Street with ratings on the stock.

Currently, Elon Musk's company has has nine “buy” ratings, “10” hold ratings and 5 “sell” ratings. Tags: Industry, Investments, Share, Stocks, bonds

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