Tesla shares plummeted 9% yesterday, to their lowest level since October last year after the company’s stunted discounts on its electric vehicles since investors grew increasingly suspicious of Tesla’s growth story, especially with its CEO Elon Musk’s head turned by the new apple of his eye, Twitter.
Analysts grew increasingly uncertain of the electric vehicle maker Tesla’s outlook as their shares dropped by almost 9% on Thursday. The stock is down nearly 70% year-on-year.
Canaccord Genuity reduced its target price for the automaker to $275 from $304, naming “cosmically bad” popular belief and a “distraught” shareholder base after Wednesday. “Elon Musk is doing Elon Musk things,” wrote Canaccord analyst George Gianarikas. “Some of this is Twitter drama, but much isn’t.”
Meanwhile, Tesla offered $7,500 discounts on some of its pricey electric vehicles in the U.S. on Thursday to encourage customers to take deliveries has been doubling its previous incentives. It also provides credits in Canada and Mexico. In addition, Tesla reduced the price of its vehicles in October.
Price cuts for Tesla’s Model 3 sedan and Model Y crossover are seen as a symbol of dwindling demand.
The company has also attempted to boost sales and deliveries by offering customers who take delivery of their new Teslas in December 10,000 miles of free charging at its Superchargers.
Many different buyers of Tesla or any other electric vehicles manufactured in the U.S. will qualify for a $75,000 incentive starting in January, emerging from Biden’s Inflation Reduction Act. As a result, many expected Tesla owners had postponed delivery of their new cars from the company until the credits took effect.
Elon Musk’s performance as the new owner and CEO of Twitter has become a significant source of concern for long-term Tesla supporters, who are urging the company’s Board of Directors to rein him in and focus on the electric car and renewable energy companies.
Musk acquired Twitter at the end of October in a $44 billion deal, selling off around $23 billion in Tesla shares to finance the deal. He has since recognized an “obvious” overpayment.
Due to yesterday’s close, Tesla short-sellers are rising by more than $15 billion year-to-year, according to Ortex’s estimates, making Tesla the most profitable short so far in 2022. Amazon and Facebook have been placed behind Tesla, with quick profits of over $5 billion each this year.
Musk is predicted to be worth $147.6 billion, down by 55% from last November. Musk is now closer in wealth to the world’s third-richest man, Gautam Adani, than the wealthiest man Bernard Arnault, making him the second-richest man on earth.
- Published By Team Hongkong Journalist