Tesla shares are halved | wolf street

But it’s not a stock split.

By Wolf Richter for WOLF STREET.

Elon Musk, the CEO who walks on water, has been busy recently with his other interests and jokes, like wanting to buy Twitter for $44 billion, and then after he’s signed the binding merger agreement, it’s like forgetting LOL, and then after realizing that the courts could shamefully force him to buy Twitter for $44 billion, he’s like, no problem, I’m willingly going to buy it and make it the next big thing, LOL, similar to the tweet, “I’m considering taking Tesla private at $420. Financing secured”, which was a joke on the weed, and no one came near the fire or his cheep last year, “I’m thinking of starting a new university: Texas Institute of Technology and Science” – not MIT but TITS, you know?

And then, in addition to Twitter and tweets, there’s SpaceX with its fancy rockets and Starlink satellite service, and its Burned Hair perfume, and all that. So the richest man in the world can afford to be funny about these things.

But it is much less rich than in November of last year. Because the only thing he hasn’t been able to do is hold on to Tesla stock. [TSLA] levitated in the ionosphere. TSLA fell 7.6% today, to close at $204.99.

So, TSLA is down in half since the whole show started to unravel last November, from its intraday high on November 4 of $414.50 and from its closing high on the same day of $409.97.

The stock price is now where it was in December 2020. As of November 4, something like $640 billion in market capitalization is gone. Easy come, easy go (data via YGraphics).

But even at this half-price price, Tesla is still ridiculously overvalued, a car company with a PE ratio of 74. Well, I apologize, for true believers, Tesla is not a car company, it’s a religion.

It’s obviously been an overall bullshit period for tech stocks, if you want to call them that, ever since Microsoft CEO Satya Nadella sold 50% of his Microsoft stock on November 22 in numerous trades, 838,584 shares for $285.3 millions, in one heck of a busy day. This turns out to have been the peak of the Nasdaq Composite, making Nadella one of the best domestic market timekeepers in history. Since then, the Nasdaq Composite has plunged 36%, including today’s 3% drop.

But Tesla had outperformed the Nasdaq by a large margin on the upside, and now it is outperforming the Nasdaq on the downside.

During the dot-com crash, the Nasdaq Composite crashed 78% and it took two and a half years to get there, from March 2000 to September 2002. So today we’re not even halfway there. But we did pull off the huge summer bear market rally, just like we did in the summer of 2000. So things are on the right track.

Tesla shares are the largest component of Cathie Wood’s Ark Innovation ETF [ARKK]which accounts for almost 10% of the fund, which is also a religion for true believers, and she remains an ardent fan, while criticizing the Fed in an open letter for raising interest rates and ruining her party.

So he told Yahoo Finance in a interview: “Certainly all stocks are struggling in this environment as the market tries to understand how far the Fed will go and how deep this recession will go. So Tesla is a solution to the problem.”

His ARK Innovation ETF, which has been a featured component for over a year in my “Stocks Imploded” column, has plunged 79% since its peak in February 2021, which was the infamous month many of these actions that she believes in so fervently began to collapse. At today’s close of $33.91, her ARKK ETF is right back where she was in September 2017. I mean, blame the Fed or whatever (data via YCharts):

But Tesla is the biggest. Unlike some of the other teams whose stocks have plunged 90% or more, Tesla has real products, almost luxury, luxury vehicles, that a lot of people want to buy around the world, and that Tesla right now doesn’t can do enough. And he’s making money building those vehicles.

Musk succeeded in foisting electric vehicles on legacy automakers, after being mocked for a decade. And now everyone is trying to make them, and they’re trying to develop their electric vehicle supply chains, and they’re trying to hire engineers, and they’re building plants, and they’re making big announcements every day. , and they’re spending tens of billions of dollars, and they’re putting out good products, but so far, they can’t do enough either.

That’s the competition, and everyone is running wild and shooting at Tesla. Tesla’s Cybertruck isn’t out yet, but two automakers have electric pickups on the road right now that can’t do enough: Ford and Rivian, and Tesla has fallen behind in what is one of the vehicle segments. top sellers in the US

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About William G.

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