Tesla Stock Value Dropped As Investors Fear Drama In Twitter: After the stock previously fell below a “critical battle line” of $150 a share, Tesla Inc. shares dropped more than 8% on Tuesday, bringing the electric vehicle manufacturer’s worth below that of oil behemoth Exxon Mobil Corp.
After closing below $150 for the first time in almost two years on Monday, a level that analysts said was a crucial gauge of investors’ confidence in the stock, shares of Tesla dropped 8.1% to $141.80 on Tuesday.
The S&P 500 index’s loss on Tuesday was the largest of the day, and Tesla shares were the most actively traded on the index as they ended a three-session losing run that had cost the company a total of 12.6% of its value.
The stock is currently down more than 48% this quarter, easily surpassing a fall of 37.5% in the second quarter of this year. This would be its worst calendar quarter in company history. Additionally, it is down more than 29% for the entire month of December, which would be a record-breaking decline, surpassing a 24.6% drop in December 2010.
Tesla’s market value dropped Tuesday, falling behind the following two S&P 500 companies: Tesla stock has dropped 60.9% so far in 2022, which would also be its worst year on record: Exxon Mobil and Johnson & Johnson Previously ranked as high as No. 5,
Tesla is now the ninth most valuable equity by market valuation in the S&P 500 index, trailing just Apple Inc., Microsoft Corp., Alphabet Inc., and Amazon.com Inc.
Evercore analysts Chris McNally, Doug Dutton, and Isaac Avila lowered their price objective on the shares of the maker of electric vehicles on Tuesday from $300 to $200 in a note, claiming that investors already recognize the company’s capabilities and that “emotional” support for the stock is eroding.
Elon Musk, the CEO of Tesla, has sold enormous amounts of stock since he paid $44 billion for Twitter in October, and he hasn’t indicated he’s through. The analysts observed that this was a factor in the price target reduction.
The analysts wrote in a note on Tuesday, “We now know Elon sold another $3.5Bn and we have yet to receive the ‘all done’ tweet.” The technical level between $150 and 163 was viewed as a crucial battle line to defend against additional weakness, but it was unsuccessful.
Technicals are essentially emotional stock entry points, and we’ve reached a stage where purchasing Tesla two years ago would have resulted in a loss.
Despite praising Tesla’s margin profile, the Evercore analysts noted that investors “are already well aware of these benefits but now must also battle test demand forecasts” for 2019 through 2025.
They said that Tesla has around 10% of the electric vehicle market in China, where development has stagnated, and that it is getting harder to ignore the “partisan elephant in the room” as Musk tweets more right-wing propaganda.
Given typical EV customer demographics (40% from CA, perhaps 70%+ from blue states) and a diminishing backlog scenario, the analysts wrote, “Investors increasingly worry about U.S. brand damage.”
The comments increased worries about Tesla stock, which had its worst week since 2020 the previous week after Musk reported the sale of $3.5 billion in company stock and big investor Leo KoGuan urged for new management at the producer of electric vehicles. The stock sale represented Musk’s second large-scale sale of Tesla stock since he acquired Twitter.
This week, additional Tesla analysts indicated growing annoyance with Musk’s Twitter activities.
They claimed that his erratic leadership at Twitter, which most recently resulted in the brief suspension of journalists, the blocking of links to other social media sites, and the holding of an online poll in which the majority of participants recommended that he “step down as head of Twitter,” has diverted him from managing Tesla.
Others have voiced concern that the unrest there and the reactivation of far-right accounts run the risk of depriving the business of advertising revenue.
On Monday, Oppenheimer analysts downgraded Tesla stock, claiming it was now difficult to distinguish between his “non-Tesla undertakings” and their research of Tesla. Musk’s ownership of Twitter has turned into an “albatross” for Tesla, according to Wedbush analyst Dan Ives, who also claimed that Musk had been using Tesla shares as “his own personal ATM.”
As Twitter’s CEO, it is time to put an end to this nightmare, Ives wrote.