The worst year for Tesla Inc.’s stock is likely to come to an end on Friday after the company lost more than $700 billion in market value due to investor apprehension over supply disruptions, demand concerns, and CEO Elon Musk’s attention to Twitter Inc.
Shares of the electric vehicle manufacturer decreased by over 65% from the beginning of the year till Thursday. After discounts Tesla made for customers to take vehicle delivery before year-end sparked concerns over demand, a new wave of share sales occurred in recent weeks. The corporation has had to contend with the temporary closure of its largest by-volume automobile facility in China. The stock of Tesla is on pace to have its worst month ever.
According to Seth Goldstein, a stock strategist at Morningstar Research Services, “there is concern that demand will fall just as Tesla’s ramping up their factories, and they’re not going to see the volume growth that the market had been anticipating earlier.”
Since going public in 2010, Tesla shares have only experienced one other negative year, an 11% fall in 2016, but this year has already seen a decline of 65.4%, making it certainly the worst year on record for the popular stock.
According to statistics from Bernstein Research, wait periods for several Tesla models in the U.S., which were as high as 30 weeks at the beginning of the year, have significantly decreased.
By the time 2023 rolls around, Tesla could not be the firm with the greatest drop rate on the list because another Silicon Valley company is closely following it. Facebook’s parent company, Meta Platforms Inc. (META), has lost 64.2% of its value so far this year as CEO Mark Zuckerberg has continued to invest billions in the “metaverse” even while the internet advertising sector, which accounts for the majority of his income, has been stagnant. Even while shares did conclude Facebook’s IPO year of 2012 30% below the original IPO price, it would only be the second year in Facebook’s history that the stock has decreased after a 25.7% drop in 2018.
As the company generated profits, increased production, and profited from EVs getting more popular overall, shares reached an all-time high in November 2021. Since that peak, the stock has fallen more than 70%.
Don’t let the irrational stock market behaviour worry you. The market will acknowledge that as we continue to perform exceptionally, Mr Musk said in a memo to staff members this week. An inquiry for comment from Tesla received no response.
Twitter takeover plunges Tesla shares
Since Mr Musk acquired control of Twitter and after Tesla, which continues to be the world’s largest automaker by market value, failed Wall Street’s estimates for third-quarter deliveries, much of the share price decline has occurred recently
According to Gary Black, managing partner of the Future Fund LLC, which owns Tesla stock, “the damage has been done since Oct. 1 and of course, that’s accelerated in December.”