Tesla weighed down by Elon Musk, Twitter seems “an endless abyss”, the Stock Exchange Council

Tesla suffered a veritable descent into stock market hell. While the electric car giant founded by Elon Musk reached an all-time high of more than $400 in 2022, the stock is currently only trading at nearly $156, a 62% plunge since the all-time high! And the outlook looks uncertain. “The next few months will be a huge test for Tesla,” which will be faced with “low investor confidence, ongoing issues in China (lots of scandals and setbacks and a slowdown in orders, ed.), question marks over demand (which slowed more than expected in the US and Europe, Ed) and the deterioration of the brand’s reputation”, notes eToro.

Recently, the price drop has been reinforced by the massive selloff of Tesla shares by Elon Musk. “Last night, Elon Musk sold an additional 22 million Tesla shares for approximately $3.6 billion. With Tesla’s stock price plummeting, this is not the Christmas present investors were expecting,” the broker said. In one year, Elon Musk’s sales reached more than $40 billion A jackpot used to fund the billionaire iconoclast’s takeover of Twitter.

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While Twitter “seems to be an endless money pit,” for eToro, the question is when Elon Musk, who tends to abandon the automaker somewhat in favor of the social network, will stop selling Tesla shares. Elon Musk “seems to be laser-focused on Twitter rather than his beloved Tesla,” adds Wedbush Securities. Elon Musk used Tesla as his “own ATM” to finance Twitter’s losses, hurt by the departure of many advertisers, the broker denounces. With the melting of Tesla’s value on the stock market, Elon Musk recently had to give his crown as the richest man in the world to the Frenchman Bernard Arnault, founder of LVMH.

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However, all is not black for Tesla. The electric vehicle continues to gain ground and its adoption is accelerating, while manufacturer profits rose in the third quarter. And RBC Capital Markets expects a 32% increase in deliveries in the fourth quarter. Suddenly, Tesla stock, which was (rightfully) the subject of a massive bubble last year, fell to less outlandish valuation levels … but still much higher than those of its largest publicly traded competitors. Indeed, Tesla pays 32 times the expected profit for 2023 and 4 times the expected revenue, which still seems excessive, despite the group’s strengths.

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We remain cautious on the outlook for the stock despite the share price collapse. Momentum, Capital’s premium stock newsletter and investment letter, has regularly issued bearish expectations for the stock this year with good timing. Experience our analyzes every morning in your email inbox. And right now, with promo code CAPITAL30J, take advantage of a free trial month. To subscribe, simply click on the link below.

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