Tesla stock, which traded at $399.93 on January 3, 2022, fell to just $125.35
on December 22, a drop of 68.66%. The manufacturer suffered the effects of the crisis in the supply of raw materials, but was also a collateral victim of the takeover of Twitter and the political slippages of Elon Musk. Has Tesla lost its former prestige?
What’s happening to Tesla? Valued at more than 1,200 billion dollars in January 2022, the number 1 electric car had everything to continue to increase in value. Even better, his latest results are excellent. Tesla sells more and more cars, earns more and more money, and never stops gaining market share. Even if inflation and the prospect of a new economic crisis are worrying, Tesla had, on paper, everything to make a success of its year 2022.
However, a week before the closing of the accounts, the Tesla action is not doing well. On December 23, it traded at the rate of 125.35 dollars, while it was worth 399.93 dollars on January 3 (-68.66%) and 355.67 dollars exactly one year ago (-64 .76%). How to explain such a critical drop? Elon Musk regularly blames the economic crisis and the American financial authorities, but the reality is probably different.
Tesla stock has fallen throughout 2022, with big drops every time Elon Musk approached Twitter. Source: Google Stocks
Elon Musk’s behavior worries
If it would be misleading, to sum up, the fall of Tesla stock to the behavior of Elon Musk (in the midst of a war at the gates of Europe and an unprecedented crisis in the supply of raw materials), it is impossible to deny the impact of the billionaire’s tweets on his business.
On December 22, Elon Musk participated in a Twitter Space with Tesla investors, in which he acknowledged having had an impact on the share price while promising them that he would take care of Tesla after fixing Twitter. , a task he considers “easy”. Elon Musk, however, did not agree to backpedal on some of his positions, in particular vis-à-vis the LGBT community, which he often made fun of. This exchange has created a new controversy, which could have an impact on Tesla stock in the coming hours.
What exactly do we blame Elon Musk for? First, his obvious disengagement from Tesla.
Since April, when he took a stake in Twitter before embarking on a procedure to take over the social network, the businessman seems less interested in Tesla. To achieve this takeover, he sold several million shares of the car manufacturer… even though he had promised that he would not. Add to that his lawsuit against Twitter, his declarations of war on the press, his ambiguous political declarations, his links with controversial personalities, his extreme reactions (like when he censors journalists)… Elon Musk is in the process of destroying his public image, dividing people into two camps: those who love him and those who hate him.
Every massive drop in Tesla stock is tied to a Twitter story. One would have thought that Elon Musk would bounce back quickly to save his beloved business, but he ultimately always ignored the problem. Even today, he doesn’t seem like he’s about to backtrack on dropping Twitter to deal with Tesla and SpaceX. He remains convinced that he can do anything, even if he has promised the arrival of a new CEO for Twitter (but he intends to keep key functions).
In addition to Twitter news, other things are alerting Tesla. 100% autonomous driving continues to be shifted, the characteristics of the Cybertruck truck are still unknown, prices are constantly changing, and Tesla still does not have a communication division… Journalist Fred Lambert, who has covered Tesla for several years for the site Electrek, is the first to worry about this situation. Fans of Elon Musk think he is so infallible that they encourage him to never question himself: “You can love Tesla and Elon and love their impact on the world without being in a cult.“
Tesla’s fall is bigger than Bitcoin’s
As Princertitude pointed out on Twitter, the 68.66% drop in Tesla stock as of December 23, 2022, makes it a bigger economic disaster than bitcoin, yet pointed to by many as the most failed of all. year.
The cryptocurrency, which was valued at $41,976.51 on January 1, is now worth $15,876. This 62.16% drop is huge but less than that of Tesla stock.
Can Tesla pull himself together? Obviously. But to achieve this, Elon Musk and his management must be ready to change a lot of things. In particular, should a new CEO be needed for Tesla? 2022 proved to the car manufacturer that selling cars was not enough: you also have to know how to take care of your image.