Elon Musk’s company, Tesla, is in shock: its shares plummet
Tesla shares fell 8 percent yesterday, reaching the lowest level in the last 52 weeks, closing the day at $138 per share. CEO Elon Musk suggested that this situation was caused by macroeconomic factors.
Tesla’s market value also fell 8 percent to $435 billion. That’s 60 percent lower than the value at the end of October, when CEO Elon Musk took over the social media platform Twitter for $44 billion.
WHY ARE TESLA SHARES FALLING?
“As guaranteed bank deposit rates begin to approach unsecured stock market returns, people will withdraw their money into stocks, causing stocks to fall,” Musk said in his tweet.
While Musk blamed rising interest rates and other macroeconomic factors, investors were not convinced by these arguments as the company underperformed other automakers. Tesla shares have fallen 59 percent since April 2022, while Ford shares have fallen 26 percent and GM shares 12 percent. The S&P 500 Index fell just 14 percent.
Joshua White, an assistant professor at Vanderbilt University who previously worked as an economist for the US Securities and Exchange Commission, told CNBC:
“Only part of Tesla’s decline in value is due to interest rates. The acquisition of Twitter is one of the main reasons for the decline. Production problems in China are another reason. We don’t know yet if China will lift the lockdowns.”
THEY ENTERED IN CONTROVERSY FROM TWITTER
“Tesla’s stock price now reflects the value of being without a CEO,” investment adviser Ross Gerber said on Twitter. “This is a shaking time for Tesla,” he said. Musk responded to Gerber on Twitter: “Please tell us your big ideas Ross…”
Gerber, on the other hand, hit back at Musk, saying it is imperative that Tesla engage in better communication and that Musk needs to get away from the distractions of Twitter.
Twitter and Tesla CEO Musk also gave a clear message after the results of the “I should quit my job” survey the day before. Musk said: “As soon as I find someone stupid enough to take this job, I’m stepping down as CEO! After that, I will only work with software teams and servers.”
LOSES THE TITLE OF THE RICHEST IN THE WORLD
Musk, who recently lost his position as the world’s richest man, reassured Tesla investors by raising the possibility of stepping down as Twitter chief executive over the weekend. But analysts continued to warn this week that Twitter could do more damage to Tesla’s stock price.
Musk sold $3.6 billion worth of Tesla shares last week. The famous billionaire sold shares of the electric vehicle company this year for an approximate value of 40,000 million dollars.