Cruel week saw Tesla stock lose $80 billion in market value

Tesla stock is experiencing its worst week since the pandemic broke out in March 2020, losing $80 billion in market value, reflecting investors’ deepening skepticism about the outlook. of the electric carmaker when CEO Elon Musk also runs Twitter.

Tesla shares hit the mark their lowest score over two years on Friday, bringing its market capitalization below $400 billion. The stock has lost 17 percent this week.

Tesla worth $1.2 trillion at the beginning of the year. According to S&P Global Market Intelligence, a loss of more than $800 billion in value equates to the total current market capitalization of more than 80 of the smallest companies in the S&P 500 index. Tesla’s market capitalization this week Fall lower than ExxonMobil, a company that relies on fueling internal combustion cars.

The downward pressure on Tesla’s stock has increased in recent months due to a combination of strong selling by Musk himself to fund his $44 billion takeover of Twitter and growing concerns about The company’s electric car sales outlook.

Tesla’s stock price fell 9% on Thursday after the automaker said it would offer US consumers a discount of $7,500 in prices on two of its best-selling models, an announcement that has raised concerns. concerned about consumer demand.

Later that day, Musk promised via Twitter that he would not sell any more of his Tesla shares for at least a year. He also says he’s open to the idea of ​​an acquisition.

“I won’t sell stocks until, I don’t know, maybe two years from now. Definitely not next year in any case and probably not next year,” he said.

Musk, who recently lost his position as the world’s richest man, has sold nearly $23 billion in shares since announcing his $44 billion acquisition of Twitter. Despite his promise in April to stop doing so, he has since sold the stock three times, most recently last week. The liquidation has angry big investors people who feel entrepreneurial have abandoned the automaker to focus on Twitter.

musk has promise to resign as the social media platform’s chief executive officer, after he found a replacement, following a poll of Twitter users Sunday on the matter.

On Friday, Wedbush Securities technology analyst Dan Ives lowered his price target to $175 from $250 for the stock but maintained an “outperform” rating. Shares of Tesla were 0.5% lower at $124.69 by mid-afternoon Friday.

Ives tweeted: “We believe that if Musk gets his focus back on Tesla, actually stops selling stock (walking, not just talking), the Board will start buybacks and the 2023 guidance is set. Be careful with it. [fourth-quarter] Called in January this stock has bottomed in our opinion and works from there.”

Of the 41 Tesla-following analysts tracked by Refinitiv, only four currently have a “sell” rating on the stock.

According to S3, a New York-based consultancy, the drama surrounding Musk has helped make Tesla the most profitable US company for short sellers this year, delivering profits on paper. more than $15 billion by 2022. Short sellers aim to profit from falling stock prices.

Since August, short sellers have increased their total short positions in Tesla by about a third to 81.8 million shares, or more than 3% of the automaker’s outstanding shares in the past year. a bet worth about $11.3 billion, S3 calculates.

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