Tesla shares fell 12% on Tuesday, wiping nearly $50 billion of the company’s value and drawing the CEO’s scrutiny Elon Musk as it seemsfocus on Twitter.
The losses exacerbated a skid it was months ago. Since Musk acquired Twitter in late October, Tesla stock has fallen by half. Since last January, when Musk started investing in Twitter, the company has lost nearly three-quarters of its value.
Early in the session on Wednesday, Tesla stock jumped about 3%, recouping some of the losses.
This week’s dizzying fall follows a disappointing sales report for the last three months of 2022 that fell short of Wall Street expectations. Tesla delivered 405,000 vehicles from October to December; analysts predicted 420,000 deliveries.
In total, Tesla sold a total of 1.3 million cars last year, which is a 40% increase from the previous year. That figure falls short of Tesla’s stated goal of 50% annual sales growth.
The latest blow has heightened some concerns that were already hanging over the automaker. Tesla faces falling demand amid fears of recession and rising interest rates, increased competition and pandemic-induced production issues.
Additionally, some major analysts and investors sharply criticized Musk for a perceived lack of focus on Tesla, saying the company needed leadership as it faced an unfavorable business environment.
“We all know Tesla’s leadership needs to be 100% focused right now,” said Ross Gerber, CEO of Gerber Kawasaki Wealth. & Investment Management, tweeted tuesday.
Gary Black, managing director of investment firm Future Fund, said Monday in response to the company’s latest sales report: “No way to sugarcoat that.”
Tesla and Elon Musk did not immediately respond to ABC News’ request for comment.
Previously, Musk attributed the fall in the share price to rising interest rates, which generally benefit savers who stand to gain from a slight increase in interest generated by accounts held in banks.
“As bank savings account interest rates, which are secured, begin to approach stock market returns, which are unsecured, people will increasingly shift their money from stocks to cash, driving the fall in stocks,” Musk said. said last month in response to concerns from a prominent Tesla investor.
Musk said late last month that he would step down as head of Twitter when the company identifies a successor.
The world’s richest person has sold nearly $40 billion worth of Tesla stock since the end of last year, including a $3.6 billion sale just last week.
The sales reduced Musk’s stake in Tesla, raising questions about his continued level of involvement in the company.
In this Jan. 7, 2020 file photo, Chinese-made Tesla Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China.
Aly Song/Reuters, FILE
Since acquiring Twitter, Musk has made dramatic changes. He dismissed senior executives and halving the company’s 7,500-person workforce, while reintegrate some formerly suspended accounts.
For his part, Musk defended his actions on Twitter as part of an aggressive effort to save the company from financial peril, which he described in a Twitter Spaces interview in December as an “emergency exercise. in case of fire”.
“This is the reason for my actions,” he added. “They can sometimes seem fake or weird or whatever.”
In an interview last month, Musk pledged to stop selling Tesla stock until at least 2024, although he has already breached his commitments to stop stock sales. He insisted he hadn’t missed “a single important Tesla meeting” since the Twitter acquisition.
Tesla remains the top seller of electric vehicles in the United States, but its lead has slipped in recent months as competitors offer a host of affordable alternatives, a S&P Global Mobility report shown in November.
The company had a 65% market share of newly registered electric vehicles in the United States through the third quarter of 2022, compared to 71% in 2021 and 79% in 2020, according to the report.
Responding to weakened demand, Tesla announced in December that it would offer rebates of $7,500 on Model 3 and Model Y vehicles delivered in the United States that month.
In a tweet on Tuesday, Musk seemed to acknowledge how his fortunes had changed: “12 months ago I was Person of the Year,” he said. said.
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