Tesla shares slump 35% in Dec, traded for $123.15 against $381.59 in Nov 2021
Elon Musk is paying attention to politics and the First Amendment ever since he took over Twitter

Elon Musk is now focusing more on politics instead of his own business, but the share price of Tesla has fallen another 35 percent so far this month, which is continuation of the trend being witnessed this year.

Not long ago, Musk was the richest person on earth but it is not the case now – a title snatched by French business magnet Bernard Arnault, pushing the Tesla owner down to the second place.

From the beginning of 2020 corresponding with the Covid pandemic, the price of Tesla share increased dramatically and reached its peak in November 2021 at $381.59. Since then, the share price has slumped to the current level of $123.15.

Meanwhile, it’s been difficult to escape the news regarding Musk these days, especially after he purchased Twitter two months ago. Since then, the news hasn’t stopped—and it hasn’t stopped Tesla’s share price from taking a massive tumble. It’s down 45 percent since Musk bought Twitter and around 70 percent since the start of the year.

Amid rumors of softening demand, Tesla has started offering incentives to new buyers. Some current owners are getting a 30-day trial of some Enhanced Autopilot features, which are usually a paid upgrade.

Tesla is also offering various discounts around the world, including $7500 for Model 3 and Model Y buyers in December, along with 10,000 miles of free Supercharging.

Excuses

Recently, Musk was found busy in blaming the macroeconomic factors as the Tesla shares continued sinking.

In an attempt to divert attention from his antics and policies, especially those related to the Twitter, the Tesla CEO used Twitter to convey his thoughts.

“Tesla stock price now reflects the value of having no CEO,” Long-time Tesla bull Ross Gerber wrote in a tweet. He mocked the Tesla Board of Directors called for a shakeup, which triggered a reply from Musk.

In his response, Musk said, “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are not guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop.”

But Tesla’s stock has dropped more than other larger automakers since Musk announced his plans to buy Twitter in Apr 2022.

Meanwhile, the Tesla chief has a lot of distractions, as Gerber notes: Musk has been stirring controversy as the new owner and CEO of Twitter, the social media giant which he acquired in a leveraged buyout in late October, and is also the CEO of a major defense contractor, SpaceX.

Musk sold billions of dollars of his Tesla holdings to finance the Twitter deal, including a $3.6 billion sale earlier this month.

He told Twitter employees he sold Tesla shares to “save” their business while proceeding to cut more than half of staff at the company and rolling out a host of product and policy changes, some of which he later reversed.

While Musk has been focused on his new role as “Chief Twit” since late October, Tesla has been offering discounts and incentives to sell cars in China, where it operates a major factory in Shanghai; fighting to make its new factories in Austin, Texas, and Brandenburg, Germany, efficient; and facing persistent supply chain challenges endemic to the auto industry, along with soaring energy prices in Europe which may reduce the appeal of a battery electric vehicle for many drivers.

Those, among other challenges, led Mizuho Securities and Evercore ISI to reduce their Tesla price targets on Tuesday.

Mizuho Securities analysts wrote in a note, that “near-term, we see potential weakness in Tesla sales as macro headwinds and a weaker consumer could drive lower demand for higher-priced EVs.”

Tesla downgraded

The Oppenheimer & Co downgraded its rating on Tesla, citing risks posed by the billionaire’s ownership and management of Twitter.

It is related to Musk’s management of Twitter, including the banning of multiple journalists, has “severely damaged” market sentiment around Tesla, and risks sparking a backlash from advertisers and consumers.

According to Oppenheimer & Co analyst Colin Rusch, Musk – Tesla CEO – is increasingly isolated as the steward of Twitter’s finances with his user management on the platform. “We see potential for a negative feedback loop from departure of Twitter advertisers and users,” he wrote to clients.

He also say that an exodus of advertisers will only further erode Twitter’s finances and force Musk to unload even more Tesla stock to cover the cash hole.

Reduced share in market

Last month, it was projected that the Tesla share in the US market share will have be less than 20 percent by 2025 with the introduction of cheaper models by the rivals.

Moreover, the number of EV (electric vehicle) models currently stands at 48 but it would be 159 by 2025.

According to report a prepared by S&P Global Mobility, Tesla’s share of new registered electric vehicles in the US stood at 65 percent in the third quarter, representing down from 71 percent last year and 79 percent in 2020.

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