'No longer investable': One of Tesla's biggest former bulls just slashed his price target, and the stock is tumbling (TSLA)

Elon Musk

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• Tesla dropped Tuesday after being downgraded by Nomura Instinet, which was formerly one of the most bullish firms on Wall Street toward the stock.

• Shares came under renewed pressure last week amid senior personnel changes and after CEO Elon Musk was filmed smoking marijuana during an interview.

• While Nomura says Tesla is "no longer investable," analysts from Baird said earlier this week that traders should "buy even with drama."

• Watch Tesla trade in real-time here.

Shares of Tesla dropped more than 2% Tuesday in premarket trading after Nomura Instinet — formerly one of the company's most bullish supporters — downgraded the stock, saying the company was "no longer investable."

"We believe that Tesla is in need of better leadership (an about face) and are moving to the sidelines until we see what happens with management," the Nomura Instinet analyst Romit Shah wrote in a client note.

Shah expressed concerns over the rising frequency of CEO Elon Musk's tweeting as well as Musk's taunts of short sellers, his recent earnings call outburst, and his increasingly unpredictable behavior.

Tesla was already under pressure before the note. Shares slid 13% last week after Musk was filmed smoking marijuana during an interview and amid personnel changes including the resignation of the company's chief accountant.

Worried about what he called the "erratic behavior of CEO Elon Musk," Shah trimmed his price target to $300 from $400 — still 5% above Tesla's Monday closing price, but a huge cut. He also downgraded his rating on Tesla to neutral from buy.

But not all analysts are so negative. Baird published a bullish note on Monday, recommending traders continue to "buy even with drama." Shares rose 8.5% on Monday following that note's release.

"While negative headlines around management turnover and executive leadership could be an overhang, we are labeling TSLA a 'Fresh Pick' as we believe strong fundamentals should drive shares higher," the Baird analysts Ben Kallo and David Katter said.

Tesla has been under even more scrutiny than usual since Musk tweeted on August 7 that he was considering taking Tesla private at $420 a share and had "funding secured." He later reversed course.

Shares have lost 20% over the past month and are down 8% this year.

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