Musk Urged to Ditch Dogecoin to Save Tesla Stock

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  Published in Media and Entertainment on Wednesday, April 1st 2026 at 0:13 GMT by Fortune
      Locale: UNITED STATES

Wednesday, April 1st, 2026 - A prominent Wall Street analyst is issuing a stark warning to Elon Musk: drop Dogecoin, or risk further damage to Tesla's stock price. Daniel Ives, a Wedbush Securities analyst, believes Musk's ongoing advocacy for the meme cryptocurrency is creating a critical "code red" situation for the electric vehicle manufacturer, currently trading around $180 - a significant decline from its nearly $400 peak a year prior.

Ives's increasingly urgent calls come amidst a challenging period for Tesla, marked by increased competition in the EV market, production hurdles, and broader macroeconomic concerns. However, the analyst specifically points to Musk's persistent involvement with Dogecoin as a key contributing factor to the stock's woes, amplifying existing risks and attracting unwanted regulatory scrutiny.

"We believe that Musk's promotion of Dogecoin, while seemingly harmless to some, has created a substantial and growing regulatory risk that Tesla can ill afford right now," Ives stated in a research note circulated to clients on Tuesday. He argued that while investors have historically tolerated, and even embraced, Musk's often unconventional behavior, the potential repercussions of continued Dogecoin promotion now outweigh any perceived benefits.

The core of Ives's argument centers around the precedent set by the Securities and Exchange Commission (SEC) investigation in 2021. Following a surge in Dogecoin's price fueled by Musk's tweets, the SEC scrutinized his online activity and issued a warning, requiring him to seek pre-approval for any future communications concerning the cryptocurrency. This stipulation, a direct result of concerns about market manipulation, remains in effect. The SEC's vigilance suggests any further enthusiastic promotion of Dogecoin could trigger a renewed investigation, potentially leading to fines, legal battles, and further erosion of investor confidence in Tesla.

Ives isn't suggesting a minor reduction in Musk's Dogecoin holdings; he's advocating for a complete exit. "For Tesla to truly ignite its stock, Musk needs to exit Doge completely, and we're not talking about a minor trim," he emphasized. He believes a decisive break would signal to investors and regulators alike that Tesla is prioritizing its financial health and adhering to compliance standards.

Musk's relationship with Dogecoin dates back several years. He has frequently tweeted about the cryptocurrency, often with playful and supportive tones, contributing to significant price fluctuations. He even integrated a "Doge" Easter egg into Tesla's infotainment system, demonstrating a clear affinity for the meme coin. During his brief tenure as "Chief Twit" of Twitter (now X), Musk actively promoted Dogecoin, hinting at potential integration into the platform's payment system - a plan that ultimately stalled.

However, this consistent promotion hasn't been without consequence. Legal teams have faced multiple lawsuits alleging Musk and Tesla of promoting a pump-and-dump scheme regarding Dogecoin. While the cases are still unfolding, they add another layer of legal complexity to the situation.

Tesla has yet to publicly respond to Ives's latest commentary. The company's silence is notable, particularly given the analyst's high profile and influence on Wall Street. Some speculate that Tesla is carefully considering its options, weighing the potential benefits of maintaining a connection to the enthusiastic Dogecoin community against the mounting regulatory and legal risks.

The implications extend beyond Tesla's stock price. The situation highlights the increasing scrutiny faced by prominent figures who engage with cryptocurrencies, particularly those with publicly traded companies. It underscores the importance of regulatory compliance in the rapidly evolving digital asset landscape. Furthermore, it raises questions about the responsibilities of CEOs regarding their online communications and the potential impact on their companies.

Analysts at other firms are beginning to echo Ives's concerns. While many remain optimistic about Tesla's long-term prospects, they acknowledge that Musk's Dogecoin fixation is a drag on performance. The next few months will be crucial in determining whether Musk heeds the warning and prioritizes shareholder value over his personal enthusiasm for the meme coin. The market will be watching closely.