One of the electric vehicle industry’s leaders was struggling on the stock market yesterday. By the close of trading on Tuesday, shares of Tesla (TSLA) had dropped significantly, marking it as the biggest loser among all shares listed on the S&P 500 (USA 500) that day.
Tesla Shares Hit the Brakes
At the time of the ring of the closing bell on Wall Street yesterday, Tesla stock had lost 8% in value, to end up at just over $138. Monday’s trading trends weren’t kind to this automaker either, as its share value closed below $150 for the first time in over two years. Some analysts have even pointed to the $150 level as a potential indicator of a general loss of investor confidence in the company’s prospects.
Tesla is on track to mark its worst quarterly performance in its history, with its shares having fallen by nearly half in value since the beginning of September. Furthermore, 2022 may end up as the firm’s worst calendar year yet on the stock market, with an over 60% drop to date. However, some are pointing not to Tesla’s business fundamentals as the proximate reason for this steep decline, but rather the decisions and behaviour of controversial CEO Elon Musk.
Musk Casts Shadow of Controversy
While Elon Musk has long been a source of controversy in the global news media, his public statements and decisions since taking the helm at Twitter in late October may be casting a shadow over investor sentiment toward Tesla.
Since the completion of the $44 billion acquisition deal by which Musk took Twitter private, he’s sold off wide swathes of his personally-held stock in Tesla, with some not seeing an end in sight. In the wake of Musk’s having sold more than $7.5 billion worth of Tesla shares since early November, many have begun referring to Tesla as his ‘personal ATM’, raising uncertainty about how the Tesla CEO’s new commitments at Twitter could influence the electric vehicle industry giant’s prospects.
According to some reports, after a series of mass firings at the microblogging platform’s headquarters since October, Musk has roped in employees at Tesla and SpaceX in an effort to keep Twitter afloat. Some are even saying that Twitter could end up in the red to the tune of $4 billion annually.
It seems that the moves made by Elon Musk in his less than two month tenure as the head of Twitter are at least partially responsible for the social media platform’s declining fortunes. More fuel has been added to the fire of criticism directed at one of the world’s richest men since he changed Twitter’s account verification mechanism to a subscription model and temporarily locked several journalists out of the platform.
Furthermore, concerns are being raised that Elon Musk’s own personal political opinions, often characterised as right-wing, could be damaging not only Twitter’s prospective advertising revenue but Tesla’s brand as well. (Source:Market Watch)
Tesla itself is facing strong economic headwinds as demand in China remains relatively weak and supply chain challenges bedevil the automobile industry, so the anxiety produced by the firm’s CEO pivoting to focus more on his recently-acquired struggling microblogging platform leaves the road ahead unclear. While Musk promised to abide by the results of a December 18th Twitter poll which showed a majority of users wishing for him to step down as CEO, it remains to be seen what’s next for the multibillionaire or the firms under his direction.