Tesla investors see ‘no floor’ after losing $300b

Esha Dey

Jan 27, 2024 – 6.22am

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Tesla investors haven’t had a stretch this bad in a long time time.

Shares of Elon Musk’s electric-vehicle giant have dropped 26 per cent this month, wiping out $US205 billion ($300 billion) in market valuation. They stock is on pace to close lower for the sixth straight week, its longest losing streak since 2016. For perspective, at that point Tesla hadn’t even launched its first mass-market car, the Model 3.

“There’s no floor in this stock in the near term,” Adam Sarhan, founder and CEO of 50 Park Investments, said in an interview. “Investors are scratching their heads. If Tesla is lowering its forecast and is not bullish on the near term, why should investors be bullish.”

“Tesla’s December results and outlook effectively pushed back the positive inflection point in the business by a year,” said Gene Munster of Deepwater Asset Management. FDC

There are plenty of reasons for the sell-off. The auto industry is warning about plunging demand for EVs. Hertz Global Holding, the rental-car behemoth, pulled back from plans to expand its electric vehicle fleet, and Ford Motor said it was seeing a weaker market for them.

Meanwhile, Tesla instituted multiple price cuts, sparking worries about thinning margins. Then came Wednesday’s fourth-quarter earnings report, when the company said it expected to expand at a “notably lower” rate in 2024, but did not given any further details. The stock tanked on the news.