Tesla’s stock fell 12% on Tuesday, wiping nearly $50 billion off the company’s value and drawing attention to CEO Elon Musk, who seems to be concentrating on Twitter.
The losses made a slide that had been going on for months worse. Tesla stock has decreased by 50% since Musk bought Twitter in late October. Since Musk started investing in Twitter in January of last year, the company’s value has decreased by almost 75 percent.
The price of Tesla stock increased by about 3% in early trading on Wednesday, recouping some of the losses.
Following a disappointing sales report for the final three months of 2022 that fell short of Wall Street expectations, there was a sharp decline this week. Between October and December, Tesla shipped 405,000 vehicles; analysts had predicted 420,000.
Overall, Tesla sold 1.3 million vehicles last year, a 40% increase from the year before. The amount was below Tesla’s stated objective of a 50% annual sales growth.
The most recent setback increased some worries that already lingered over the automaker. Tesla is dealing with increased competition, declining demand due to recession worries and interest rate hikes, as well as production issues brought on by the pandemic.
Additionally, a number of analysts and influential investors have harshly criticized Musk for what they perceive to be a lack of focus on Tesla, arguing that the company needs leadership as it copes with a challenging business environment.
“We all know Tesla management needs to be 100% focused at the moment,” Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, tweeted on Tuesday.
Prior to now, Musk has blamed the falling stock price on rising interest rates, which is typically advantageous for savers as they stand to gain from an increase in the interest yielded by accounts held at banks.
“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,” Musk said last month in response to concern from a prominent Tesla investor.
Musk announced late last month that he would step down as Twitter’s CEO once the company named a replacement.
Since late last year, the richest man in the world has sold nearly $40 billion worth of Tesla stock, including a $3.6 billion transaction just last week.
The sales have decreased the amount of Tesla stock that Musk owns, which raises concerns about his continued level of involvement with the business.
In a tweet on Tuesday, Musk appeared to acknowledge how his fortunes had changed: “12 months ago, I was Person of the Year,” he said.
