Tesla’s sell-off intensified on Tuesday, with the stock closing down 11%. Elon Musk’s electric automobile company is days away from closing out its worst month, quarter and 12 months on record and has moved past Meta to turn into the worst-performing stock in 2022 among the many most respected tech firms.
The newest drop comes after The Wall Street Journal reported that Tesla will proceed a weeklong production halt at its Shanghai facility, facing a fresh onslaught of Covid cases inside its Chinese workforce.
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Tesla performance, year-to-date
Reuters reported that when Tesla’s Shanghai plant reopens in January, it is going to accomplish that for just 17 days, in a break from Tesla’s established practices. Shanghai has been battered by a fresh wave of Covid infections this month.
Tesla shares have fallen 73% from their record high in November 2021. The stock is down 69% in 2022, greater than double the decline within the Nasdaq. Amongst major carmakers, Ford is down 46% and General Motors has fallen 43%. Since its IPO in 2010, Tesla has only fallen in a single other 12 months, an 11% drop in 2016.
Elon Musk attends The 2022 Met Gala Celebrating “In America: An Anthology of Fashion” at The Metropolitan Museum of Art on May 02, 2022 in Recent York City.
Dimitrios Kambouris | Getty Images
Twitter is bleeding money, and Musk is selling Tesla stock in big chunks. In response to filings in mid-December, Musk sold about 22 million more shares of Tesla, which were price around $3.6 billion, Earlier this 12 months, Musk told his thousands and thousands of followers on social media that he had “no further TSLA sales planned” after April 28.
After his latest stock sale, Musk said on Twitter Spaces on Dec. 22 that he wouldn’t be selling any stock for 18 to 24 months. In a debate with a Tesla shareholder, Musk pinned Tesla’s declining share price on Federal Reserve rate hikes, tweeting that “people will increasingly move their money out of stocks into money, thus causing stocks to drop.”
His words have done little to placate investors. Trading volume crossed 201 million shares on Tuesday, the second-highest mark for the 12 months, in response to FactSet, behind Dec. 22. Tesla’s top five trading days by volume have all been since Dec. 13.
For the month of December, Tesla has plunged 44%, by far its worst month ever, because it had never fallen greater than 25% in a single month. And within the fourth quarter, the stock is down 59%, worse than its 38% drop within the second quarter of this 12 months, which had been its worst period on record.
Last week, Tesla expanded discounts in North America for buyers of Model 3 and Model Y electric vehicles. Those discounts got here after the automaker offered incentives in mainland China for December auto sales earlier this month.
Pressure can also be mounting within the used-car market, with the typical price for a used Tesla dropping 17% from July highs, and with used Teslas lingering longer than other makes before being resold.
Meanwhile, at Twitter, Musk has continued to flirt with controversy, welcoming back previously banned users, enabling the continued releases of internal messages related to the corporate’s past handling of Covid and election-related content, and flip-flopping on policy changes.
Firms have paused or suspended paid promoting on the platform, prompting outbursts from Musk.
Wedbush Securities’ Dan Ives wrote in a report on Tuesday that Musk’s leadership issues posed potentially deeper problems for the automaker.
“At the identical time that Tesla is cutting prices and inventory is beginning to construct globally in face of a possible global recession, Musk is viewed as ‘asleep on the wheel’ from a leadership perspective,” wrote Ives, who maintained his buy suggestion on the stock.
Tesla investors want Musk to refocus his efforts on stabilizing the corporate that accounts for the overwhelming majority of his wealth. Due to prolonged sell-off, Musk ceded his title because the world’s richest person earlier this month to LVMH chair and CEO Bernard Arnault, in response to Forbes.
“I believe he really must deal with operations, deal with giving us great cars,” said Craig Irwin, an analyst at Roth Capital who has a hold rating on the stock and an $85 price goal.
Tesla closed on Tuesday at $109.10.
— CNBC’s Lora Kolodny contributed to this report.
WATCH: Elon Musk must deal with operations at Tesla
