Tesla had a bad 2022.
On the stock market, it’s a real nightmare.
Tesla stock lost more than 65% of its value to end the year at $123.18. It started in 2022 at $352.26. This collapse resulted in more than $720 billion in market capitalization evaporating in a single year, a real disaster for shareholders.
Elon Musk, the fickle and charismatic CEO of the automaker, attributes this stock market disaster to macroeconomic and geopolitical factors.
“Macro conditions are tough: energy in Europe, real estate in China and the Fed’s frenzied interest rates in the US,” the billionaire explained on Dec.
Macros v. Twitter
Europe is experiencing an energy crisis due to the war between Russia and Ukraine, which is affecting economic activity. The Federal Reserveor the Fed, raised rates sharply for several months to crush inflationary, the highest in forty years. This monetary policy raised concerns about a so-called hard landing on the economy, aka Depression.
If Techno King’s analysis is valid, many individual Tesla shareholders (TSLA) – Get a free report However, believes that the stock market’s decline in stock prices is due to the CEO’s actions after he bought the social network Twitter.
“Elon has now wiped $600 billion of tesla assets and still nothing from the Tesla board. That is completely unacceptable,” individual shareholder Ross Gerber lamented on December 16.
This criticism has caused friction between him and Musk.
“Tesla is doing better than ever! We don’t control the Federal Reserve. That’s the real problem here,” Musk replied.
But Gerber insisted: “I agree that the Fed has screwed up big time and the macro is deteriorating. But tesla is doing very well and should be outperforming tech peers like Apple.. . should have PE at least twice the apple. On a bad day, tesla would be $250 a piece.”
Three days later, with Tesla shares continuing to fall, Gerber asked the board to find a new CEO.
“Tesla stock price now reflects the value of not having a CEO. Great job tesla board – Time for a change,” Gerber wrote on Dec. 20.
Tesla affected by Twitter
Critics of the billionaire believe that Tesla’s decline was due to his acquisition of Twitter. According to him, the tech mogul decided to buy Twitter to turn the platform into a place of free speech. Since conducting a bid to acquire the social network on April 22, the tech mogul has only focused on Twitter.
He is ubiquitous across the platform, attacking enemies he is aware of and frequently creating controversy. The problem is that since the $44 billion bid for Twitter, Tesla’s stock has continued to fall. Musk finalized the deal on October 27, less than two months ago. Tesla shares have lost nearly 39% of their value in this short time.
Alexander Edwards, President of research-based consulting firm Strategic Vision, said: “Over the past year, we have seen Tesla’s brand lose its brand value, from basic safety. to sophistication”. “These problems are exacerbated by the fact that battery electric vehicles (BEVs) are often purchased by self-identified Democrats, who often oppose Musk’s actions with Twitter. Sales of Tesla cars will become a big hit. more difficult when the Twitter narrative makes these mediums seem less than fun and alienates key buyers.”
Against this backdrop, Dan Ives, star analyst at Wedbush and one of Tesla’s most optimistic, believes a break out of this negative spiral is possible. He listed just 10 things Musk, who once announced he would step down as CEO of Twitter, needs to do by 2023 “to change the negative sentiment surrounding the Tesla story.”
To-do list
”Name a Twitter CEO by the end of January,” recommends Ives. “Stop selling stocks and no more crying boy wolf or Pinocchio” and “formally put in place the 10b5-1 plan to let investors know that no big sell block is coming when Musk has sold approx. $40 billion in TlSA stock over the past year.”
The analyst advises Musk to “set conservative targets and deliveries in 2023 with darker macro conditions. In our view, the 50% growth target does not happen, given the growth rate.” 35% delivery* is a more realistic and achievable goal for 2023.”
The billionaire also has to focus his attention back on Tesla because Musk is “the heart and lungs of Tesla and vice versa,” Ives said.
”Announced that Cybertruck deliveries will begin hitting the road in late 2023. Timing is key here with competition from all angles and concerns over production status set to push. this to 2024,” Ives suggested.
In addition, the analyst recommends some changes to the Board of Directors. New additions must have experience in technology leadership and electric vehicles.
Tesla should also announce a share buyback program to regain market confidence: “With stock at this level, in our view, Tesla is an undisputed strategic move with treasures. its giant,” Ives defended, adding that the company should also be more transparent around its margin structure.
In the end, Ives said that Musk should be less political because “the more political Musk becomes on Twitter, the worse it is to sell electric cars to the masses. It’s that simple and it’s still the main concern of the public. Investors.”
”Let’s draw a strategic plan for Twitter,” wrote the analyst. “Right now, very simply, the fear is that Twitter is bleeding money with advertisers on the run (for now), which means more losses and thus sales of TSLA’s stock.” Musk more. After the new CEO, let’s come up with Twitter’s 3 year strategy and what this will do can be, Super App, ‘X’, WeChat 2.0, etc.”
The billionaire has yet to respond to the analyst’s advice. However, make sure he heard the message.
