When will it stop falling? It’s anyone’s guess

Funviralpark 1 year ago 0

At this point, it might be easier to change a Model S tire in 10 minutes than it is to try to bottom out Tesla’s (TSLA) battered inventory.

The EV maker’s shares plunged 11.4% in Tuesday’s session, raising new questions about the current pace of consumer demand after reports that the company would cut capacity at its main Shanghai factory through January. . Tesla’s ticker page is one of the top three visited on Yahoo Finance, highlighting ongoing fears over the ever-volatile stock price.

The stock fell as much as 4% in Wednesday’s pre-market trading before rebounding.

The shocking stats about Tesla’s stock price (and everything else associated with it) have become even more startling in the wake of the recent decline.

  • 1 month: -41%

  • 3 months: -60%

  • 6 months: -55%

  • YTD: -70% (S&P 500 -19%)

  • Year-to-date market cap decline: $241 billion

  • Elon Musk’s Net Worth Declines YTD: -$141 Billion

Analysts say a bottom is not yet in sight for the stock, despite heavy selling into 2023.

Wedbush analyst and Musk commentator Dan Ives told Yahoo Finance, “Mr. Musk put these five alarms on Tesla stock and he’s the only one who can turn them off. It’s the perfect storm between the Twitter debacle and the current demand-cracking.”

In large part, the fact that no one on the street is willing to put a bottom on Tesla stock reflects the increasing amount of bad news swirling around the company.

The first is on-demand negative optics in both the US and China.

Last week, Tesla said on its website that it was offering a $7,500 discount on Model 3 and Model Y vehicles delivered in the United States in December. That’s in line with analysts slashing their fourth-quarter shipment forecasts before reporting in early January.

After that, the elephant in the room remains — Musk’s continued chaotic Twitter run and how it might affect Tesla’s operations.

The prospect of Musk selling more shares to boost Twitter’s turnaround is also weighing on the stock. Musk said in a chat on his new Twitter space a week ago that he won’t sell Tesla shares until 2024 at the earliest. He made a similar declaration this year, but since then he has sold more shares.

Rege-Jean Page sees Elon Musk arriving at the Met Gala themed In America: An Anthology of Fashion at the Metropolitan Museum of Art in New York City, USA on May 2, 2022. REUTERS/Andrew Kelly

In other words, investors just don’t believe Musk on this point, and they’re vocal about their views.

When you package it all up, Tesla stock is still trading at a premium multiple relative to the broader market, creating a potential sell-off event that may not follow its course until a clear positive development emerges. There is a nature. (Mr. Musk’s extradition of Twitter’s CEO would be a big help, analysts say.)

Ives added:

Sounds almost correct.

Brian Sotzi general editor, Yahoo Finance anchorFollow Sozzi on Twitter @BrianSozzi and LinkedIn.

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