Tesla stock, which traded at $399.93 on January 3, 2022, is now worth just $125.35 December 22, a decrease of 68.66%. The manufacturer suffered from the effects of the crisis in the supply of raw materials, but was also a secondary victim of the takeover of Twitter and Elon Musk’s political slide. Has Tesla lost its former prestige?
What is happening with Tesla? The number 1 electric car, valued at more than $1.2 trillion by January 2022, had everything to continue to increase in value. Even better, his recent results are excellent. Tesla sells more and more cars, makes more and more money and never stops gaining market share. Although inflation and the prospect of a new economic crisis are worrying, on paper Tesla had everything to make its year 2022 a success.
However, a week before the end of the accounting, the Tesla action is not going well. On December 23, it traded at $125.35, while it was worth $399.93 on January 3 (-68.66%) and $355.67 exactly one year ago (-64.76%). How to explain such a critical decline? Elon Musk regularly blames the financial crisis on the US financial authorities, but the reality is probably different.
Elon Musk’s behavior is worrying
If it would be misleading to sum up the fall of Tesla stock to Elon Musk’s behavior (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 about his company.
On December 22, Elon Musk just attended to a Twitter space with Tesla investors, where he acknowledged influencing the stock price while promising them he would take care of Tesla after fixing Twitter, a task he considers “easy.” However, Elon Musk did not agree to back up some of his positions, especially towards the LGBT community, which he often made fun of. This stock exchange has created a new controversy that could affect Tesla stock in the coming hours.
What do we blame Elon Musk for? First, his apparent withdrawal from Tesla.
Since April, when he took a stake in Twitter before starting a procedure to take over the social network, the businessman seems less interested in Tesla. To achieve this takeover, he sold several million shares in the automaker… even though he had promised he wouldn’t. Add to that his lawsuit against Twitter, his declarations of war on the press, his ambiguous policy statements, his connections to controversial personalities, his extreme reactions (such as when he censors journalists)… Elon Musk is destroying his public image, sharing people in two camps: those who love him and those who hate him.
Every massive drop in Tesla stock is linked to a Twitter story. You would have thought that Elon Musk would come back quickly to save his beloved business, he ultimately always ignored the problem. Even today, he doesn’t seem like he’s going back on ditching Twitter to deal with Tesla and SpaceX. He remains confident he can do anything, though he has promised a new CEO will come to Twitter (but he intends to keep key functions).
In addition to Twitter news, there are other things warning Tesla. 100% autonomous driving continues to be moved, the features of the Cybertruck truck are still unknown, prices are constantly changing, Tesla still does not have a communications department… Journalist Fred Lambert, who has covered Tesla for several years since Electrek , is the first to worry about this situation. Fans of Elon Musk believe he is so infallible that they urge 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 greater than Bitcoin’s
As mentioned Uncertainty on Twitter68.66% fall in Tesla shares as of December 23, 2022 makes it a bigger financial disaster than bitcoin, yet singled out by many as the year’s biggest failure.
The cryptocurrency, which was valued at $41,976.51 on January 1, is now worth $15,876. This 62.16% drop is huge, but smaller than Tesla stock’s.
Can Tesla get its act together? Naturally. But to achieve this, Elon Musk and his management must be ready to change a lot of things. Is there a particular need for a new CEO for Tesla? 2022 proved to the car manufacturer that it was not enough to sell cars: you also need to know how to look after your image.