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Tesla’s Stock is About to Have its Worst Month, Quarter and Year on Record

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Tesla's Stock is About to Have its Worst Month, Quarter and Year on Record

(CTN News) – With the stock ending down 11% on Tuesday, the sell-off in Tesla accelerated. Elon Musk’s electric vehicle firm, which has passed Meta to become the worst-performing stock among the most valued tech companies in 2022, is only days from completing its worst month, quarter, and year.

The most recent decline follows news in The Wall Street Journal that Tesla will extend a week-long production shutdown at its Shanghai site due to an increase in Covid cases among its Chinese staff.

According to Reuters, Tesla’s Shanghai facility will reopen in January for only 17 days, a departure from the company’s custom. This month, a new wave of Covid infections has devastated Shanghai.

Tesla shares dropped 11% on Tuesday and are now down 44% in December

Since reaching a record high in November 2021, Tesla stock has dropped by 73%. In 2022, the stock is down 69%, more than twice as much as the Nasdaq.

Ford is down 46%, and General Motors is down 43% among the big automakers. Tesla has only had one previous year of decline since its IPO in 2010, an 11% decline in 2016.

Musk is selling large quantities of Tesla shares while Twitter is losing money. Musk reportedly sold an additional 22 million Tesla shares in mid-December for a total transaction value of around $3.6 billion.

On social media earlier this year, Musk informed his many fans that he had “no additional TSLA sales planned” after April 28.

Musk said on Twitter Spaces on December 22 that he would not sell any further shares for 18 to 24 months after his most recent transaction.

Musk claimed in a Twitter exchange with a Tesla shareholder that “people would increasingly shift their money out of equities into cash, causing markets to decline” due to the Federal Reserve raising interest rates.

Investors have not been well comforted by his statements. According to FactSet, trading volume on Tuesday exceeded 201 million shares, making it the second-highest day of the year after Dec. 22.

Since Dec. 13, Tesla’s best five trading days by volume have all occurred.

Since it had never before declined more than 25% in a single month, Tesla’s December decline of 44% is by far its worst month ever.

Additionally, the stock is down 59% in the fourth quarter, worse than the 38% decline it saw in the second quarter of this year, which was already its worst quarter on record.

Tesla this week increased its discounts for purchasers of its Model 3 and Model Y electric automobiles in North America. These reductions followed the carmaker’s incentives earlier in mainland China for December vehicle sales.

The used-car market is also under pressure, as used Tesla prices have fallen 17% from their July highs and remain on the market longer than other manufacturers.

Meanwhile, Musk has continued to play with controversy at Twitter, allowing the continuous dissemination of internal communications about the company’s earlier treatment of Covid and election-related material, inviting back previously banned users, and flip-flopping on policy changes.

Companies have stopped or stopped running sponsored advertisements on the site, which has caused Musk to erupt.

Dan Ives of Wedbush Securities said in research on Tuesday that the carmaker might face more serious concerns due to Musk’s leadership troubles.

“Musk is perceived as ‘asleep at the wheel’ from a leadership standpoint at the same time as Tesla is lowering prices and inventory is beginning to develop internationally in the face of a predicted global recession,” said Ives, who maintained his buy rating on the company.

Tesla shareholders want Musk to put his energy back into stabilizing the business that makes up the overwhelming bulk of his fortune.

According to Forbes, Musk gave up his position as the wealthiest person in the world to LVMH chair and CEO Bernard Arnault earlier this month due to the protracted sell-off.

Craig Irwin, an analyst at Roth Capital, said, “I believe he has to concentrate on operations, on bringing us outstanding automobiles.” Irwin has a hold recommendation on the company and an $85 price target.

Tesla’s Tuesday closing price was $109.10.

Related CTN News:

Elon Musk Poll Shows 57.5% Want him to Resign as Twitter CEO

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