Elon Musk is no longer the ‘darling’ of Wall Street

According to CNN, six months ago, Tesla’s stock price skyrocketed. At that time, Elon Musk’s cult electric car company was valued at $ 1.1 trillion , more than the total market capitalization of the top 10 car companies in the world combined.

Not long ago, Elon Musk declared himself the largest shareholder of the social network Twitter. He also confirmed that he is in the process of acquiring the world’s leading social media company.

Since that time, uncertainties have befallen Tesla stock. Investors are concerned that the controversy surrounding the Twitter acquisition will distract Musk from managing Tesla. However, that’s not the electric vehicle maker’s only problem.

Supply chain disruptions, strict blockade measures in Shanghai, and a third-quarter report that fell short of Wall Street’s expectations also caused Tesla stock to lose its momentum.

“ Overall, the third quarter was nothing special. Wall Street is bound to be a bit disappointed because Tesla sales fell short of expectations ,” said Daniel Ives, technology analyst at Wedbush Securities.

Longtime Tesla critics scoffed that Tesla’s astonishing price increase of nearly 1,900% in the fall of 2018 has never been concretely proven. They argue that the current internal problems are an indicator of a slipping future for America’s largest electric car company.

“ In general, bad things happen when prices fall and production slows down ,” said Gordon Johnson, a Wall Street analyst who tracks Tesla.

Last weekend, Tesla unveiled its latest robot model and was accompanied by a series of tweets from Mr. Musk on Twitter over the weekend. The billionaire once again promises that the robot business will soon help create a breakthrough in revenue and profit for the company.

However, the announcements about Tesla’s artificial intelligence (AI) ambitions were made at the wrong time and not good for the company’s stock, Ives said.

“ While this shows that Tesla has foresight, it is not appropriate for the current situation. There is a view that Musk is not focused on what he needs to do right now ,” Mr. Ives commented. ” It’s not cool when you hold an AI event on Friday and report that the sales didn’t meet expectations on Sunday .”

However, this is not the first time Mr. Musk’s comments have caused turmoil for Tesla stock in the past half year.

This CEO once described Tesla’s two new factories in Texas, the US and Germany as “huge money burning furnaces” when they cost billions of dollars. He even mentioned that Tesla was in danger of bankruptcy in an interview with the media.

And yet, with Tesla shares plunging in June, Musk posted on a forum that he had a “super bad feeling” about the US economy and announced plans to cut Tesla’s staff.

” Musk has added fuel to the fire, and the Twitter controversy has put more pressure on Tesla stock over the past six months ,” said analyst Ives.

Still, Tesla isn’t the only tech stock that’s been hit by turbulence lately. Many other large-cap technology stocks also dropped sharply when Wall Street was concerned about the risk of a global recession following the decision to raise interest rates continuously by the US Federal Reserve as well as many central banks around the world. gender.

Apple stock also fell 21% in the second and third quarters, while Alphabet and Amazon stocks both dropped 31%. Meta shares (Facebook’s parent company) even plunged 39%.

In this situation, analysts say Tesla needs to improve its business as a way to assure investors that the value of their shares is not a “bubble”.

Reference: CNN