Tesla is completely lost on Wall Street.
The electric vehicle manufacturer is having a dark year in the stock market. And those difficulties worsened on Dec. 13 with another sharp drop in the stock price of almost 4%.
In all, the Tesla stock lost has lost 54.2% of its value in 2022, translating into a drop in market capitalization of nearly $600 billion. Tesla (TSLA) is down 60%, compared to its all-time high reached in November 2021.
Most worryingly, on Dec. 13, shares of the Model Y maker were down while the broader market was up. This stock market debacle is now causing a heated debate within the Tesla community, where fans and individual investors are divided, as they see their investments melt away day by day.
"$TSLA is now down -61.2% from its all-time high in Nov 2021, officially making this the largest drawdown in $TSLA stock history," Sawyer Merritt, who describes himself as Tesla investor, posted on Twitter on Dec. 13. "Conversely, $TSLA shares are trading at their cheapest-level ever (from a forward earnings perspective)."
Disgruntled Shareholders
For Leo KoGuan, one of Tesla's largest individual shareholders, the current fall is not explained by the fundamentals of the company, but more by external factors.
"No longer about fundamental of Tesla but smart and powerful negative poison gazing Tesla," KoGuan tweeted on Dec. 13. "We are shareholders are accidental war casualties. The board is established to protect SH. The board members are smart, hopefully they will perform shock therapy to resuscitate stock price."
Gary Black, another very vocal Tesla shareholder, believes that one such external factor is Tesla's neglect by Elon Musk. This abandonment is due to the fact that the billionaire is focused on revamping the social network Twitter, which he acquired at a cost of $44 billion.
Since the finalization of the deal on Oct. 27, the serial entrepreneur has only talked about Twitter on a daily basis. He has also become very political and now sees himself as a vindicator.
Given that the old Twitter team had sanctioned the conservatives, Musk made it his mission to rebalance things in favor of the Republicans, in the name of free speech. But this approach frightened advertisers. Musk also notably attacked Apple (AAPL). Many experts and Tesla fans believe that these clashes are now causing damage to the Tesla brand.
"I have utmost respect for @elonmusk as a manager, leader, and visionary," Black said on Dec. 13. "Just wish he’d hire someone to fix Twitter and focus on $TSLA as CEO with all its opportunities and challenges and which could be a $3T market cap company in 5 years."
'Tesla Will Be Great Long-Term'
Faced with disillusioned investors, Musk has just made a vigorous defense of Tesla, intended to appease their anger and frustration.
"Most of @elonmusk’s net worth is in $TSLA and he doesn’t seem worried. That’s because he knows Tesla is going to be ok," one Twitter user posted on Dec. 13.
"Tesla will be great long-term," the billionaire commented. "But doesn’t control macroeconomic tides."
This defense is in line with his statements a few days earlier.
"Macro conditions are difficult: energy in Europe, real estate in China & crazy Fed rates in USA," Musk said on Dec. 8.
Musk's analysis seems to be shared by tech analyst Pierre Ferragu, who believes that Tesla's fundamentals are solid and therefore cannot explain the stock's fall. For Ferragu, the electric vehicle manufacturer does not have a demand problem and should continue to dominate its rivals in the long term.
"Tesla is progressively reducing prices to boost demand and absorb capacity growth. It has the cost trajectory to do so without hurting gross margins: Subsidies in the US, localized production in Europe, two giga factories ramping, absorbing fixed costs," Ferragu said.
But for individual investors, the only way to halt Tesla's stock slide is with a big development, which could come with the announcement of a stock buyback plan or a positive update on Q4 vehicle delivery targets.
"If the BOD of tesla made an announcement on what’s happening with tesla leadership. Someone should be interm CEO. The stock decline would end. It’s that simple. @MartinViecha $tsla," Tesla's investor Ross Gerber tweeted at the company.
BOD stands for board of directors.
