Shares of Tesla hit a low in more than two years today, making it the company’s worst day in eight months. The electric car maker – owned by billionaire and Twitter owner Elon Musk – is facing financial difficulties, writes The Guardian.
Since October, the value of Tesla stock has dropped by more than half. Investors are increasingly concerned that Musk is spending too much time on Twitter instead of Tesla. And this is far from bearing fruit from him. His time as head of Twitter was marred by chaos due to the new policies he implemented and implemented at his convenience.
Last week, he announced he would step down as CEO of Twitter after millions of Twitter users voted for another CEO in a poll he created. According to experts, that behavior has sent confidence in Tesla plummeting, with shares worth 73% less than in 2021.
Production reduction
The reason the stock is down 11.4% today is due to the rumor that Tesla plans to cut auto production in Shanghai in January. Reuters previously reported this. That news has created fears of a decline in demand for Tesla, also considering the explosive increase in the number of corona infections there.
“There should be no question that there is fear with regards to demand for electric cars,” said Great Hill Capital chairman Thomas Hayes, who also looks to electric car maker Nio, which is unable to carry out deliveries. Furthermore, there is a ‘perfect storm’, with high interest rates, tax losses and stock sales by individuals who own a large portion of Tesla stock.
Depreciation
Not only is Tesla’s share declining in value, but the residual value of cars is also plummeting faster than that of other manufacturers, according to Reuters. Something that also plays a role in Tesla’s demand.
Earlier, Musk attributed the financial woes surrounding Tesla to interest rate hikes by the Fed, saying people would “invest more and more money in cash instead of stocks, and therefore stocks go down in value.”
Musk himself sold more than $4 billion of his Tesla stock to buy Twitter, which he acquired for $44 billion. But where he said a few weeks ago not to sell any more Tesla shares for at least 18 months, financial reports show he promised the same in April and then sold millions of shares.
Source: BNR
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