At the beginning of the year, it seemed Hollywood was falling in love with young upstart, Tesla. Over the summer in its home state of California, Tesla outsold the perennial midlife crisis car of choice, Porsche.
By the end of the third quarter of 2013, the Tesla Model S was the best-selling car in eight of the top 25 wealthiest zip codes in America. All eight of those zip codes were in California, with Tesla accounting for 15.4% of new cars in Atherton. It seems that love was almost exclusively Californian, though. According to Edmonds.com, Watermill, NY was the only rich town outside of California where the Model S broke above the 1% mark.
(Watch: Tesla Model S: Rich folks' fave)
While the Golden State's generous tax rebates for electric vehicles helped subsidize Tesla sales, some of the purchasing had to do with the car being a status symbol for the tech elite in Northern California and the media elite in Southern California.
Now, however, one of Hollywood's most politically correct icons is sour on the electric car maker. In the latest issue of Esquire magazine, Tom Junod interviews actor/director George Clooney, writing:
"'Hey, where's the Tesla?' I said when I was leaving his house… I didn't know if he had a Tesla or not, and was trying to see if even George Clooney was susceptible to Hollywood cliché.
'I had a Tesla. I was one of the first cats with a Tesla. I think I was, like, number five on the list. But I'm telling you, I've been on the side of the road a while in that thing. And I said to them, 'Look, guys, why am I always stuck on the side of the ******* road? Make it work, one way or another.' '
We take the Lexus to the new office…"
(Read more: George Clooney not happy with Tesla Roadster he used to own)
Though Tesla's stock has quadrupled since the start of the year – and up 155% since May alone – shares are down nearly 23% in the past month after the company reported fewer-than-expected car sales and after reports of another fire involving a Tesla vehicle.
Can Tesla's stock weather the bad publicity or is does it have more to drop?
"I think the valuation is ridiculous at 262 times earnings," says John Stephenson, portfolio manager at First Asset Investment Management. "I think it's totally a cult stock. It's driven by celebrity endorsements."
"Once you start losing Hollywood, you losing a big part of the market," says Stephenson. "Clearly, some of the bloom is off the rose. I think this falls and falls considerably."
While Tesla still has had a phenomenal 2013, buying Tesla's stock now will see portfolios go straight to DVD, according to Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson.
"This is really the perfect storm of the fundamentals and the technicals here and gravity has taken over," says Ross, making not-so-subtle references to some of Clooney's more popular oeuvres. "I'm a seller as well. We all know the story of the 300% rise but that story's gone bad."
To see the fundamental reasons Stephenson believes Tesla's valuations are faulty and to see Ross' price target on Tesla, watch the video above.
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