Tesla stock plunges as investors punish Elon Musk

Illustration: Sarah Grillo/Axios

Tesla’s stock plunged by 9% on Tuesday, poised to end 2022 on a grim note after having shed over 70% of value this year.

Why it matters: Investors are expressing dissatisfaction with Elon Musk by punishing Tesla’s shares, with the billionaire distracted by his tumultuous buyout of Twitter.

  • Meanwhile, Tesla is facing challenges associated with a slowing global economy and reported troubles in China, its largest market.

Driving the news: A rout in blue chip and technology shares, and the failure of the traditional year-end “Santa Claus” rally to materialize, has helped Tesla’s market losses snowball, with the stock having fallen for seven consecutive days.

Zoom out: During the pandemic, Tesla could seemingly do no wrong, muscling its way into the exclusive club of companies worth over $1 trillion. A relentless bear market has conspired with concerns about a distracted Musk, and a weaker environment for electric vehicles overall, to shave billions from Tesla’s market capitalization.

The intrigue: With the House that Elon built seemingly on fire — and the polarizing billionaire’s own net worth suffering as a result — Musk is actively seeking a full-time CEO to helm Twitter. But a concrete timetable has yet to be revealed.

What they’re saying: “At the same time that Tesla is cutting prices and inventory is starting to build globally in the face of a likely global recession, Musk is viewed as “asleep at the wheel” from a leadership perspective for Tesla at the time investors need a CEO to navigate this Category 5 storm,” Dan Ives, Wedbush’s veteran tech analyst, wrote in a research note on Tuesday.

The bottom line: Everyone, including faithful Tesla investors, are wondering where the bottom is. Until Musk designates a successor at Twitter, an end to the rout might not be in sight.

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