The Elon Musk-led Tesla was knocked out of the top ten businesses in a key US stock index on Tuesday after its shares fell 11% in a single session. Tuesday marked Tesla’s seventh consecutive day of losses, the company’s longest since 2018.
Why are shares nosediving?
Elon Musk‘s decision to cease production at Tesla’s Shanghai facility, as well as reports of lower output at the company’s main production facilities, have been cited as direct reasons for Tesla’s share price decline. According to CNBC, Oppenheimer was among the first big research firms to lower Tesla’s shares to “perform” from “outperform” previously.
Furthermore, reports that Tesla was offering individuals in the United States a $7500 discount on its two highest-volume models, in addition to indicators of declining demand, did not excite Tesla investors.
Musk’s takeover of Twitter and Tesla’s plunging fortunes
Tesla’s 69% value has evaporated by the end of 2022 due to Elon Musk’s Twitter takeover. According to reports, Musk’s linked online activities have caused investors to get concerned.
However, there is still reason to be optimistic about Tesla’s innovation curve.
“Despite the stock’s performance, Tesla’s innovation curve appears to be accelerating, a stark contrast to other large tech companies whose incremental product updates appear stagnant at best,” Bloomberg reported, citing Canaccord Genuity analyst George Gianarikas’ note last week.
Tesla, is a publicly-traded company and investors are not pleased
Tesla’s stock has dropped more than 44% since the deal was announced on Oct. 27, with Musk reportedly withdrawing engineers from projects at the vehicle to help keep Twitter running after firing half of the company’s staff a week into his takeover.
Some major advertisers, who account for approximately 90% of Twitter’s revenue, have backed out. Those who have spoken out say his toxic behavior, combined with poorly planned site improvements that resulted in a profusion of phony accounts, is too much. (Musk has previously blamed unidentified “activists” for forcing firms to reduce spending.)
