Year-to-date, Tesla’s (TSLA) stock has experienced a dramatic plunge of nearly 70 percent by December 22nd – leaving investors rattled.
At its current rate, Tesla (TSLA) stands to experience a record-breaking annual decline of $626 billion in shareholder value as reported by Bloomberg. Just one year ago, the company’s shares hit an all-time high and elevated their valuation above a colossal figure of $1 trillion.
Investors are currently trying to find a floor in Tesla’s stock, with its shares ending the trading day at $125.35 on December 22nd after hitting an all-time high of $409.97 per share just five weeks prior – which equates to $1,229.91 post-3-for-1 split since then.
This December is already on its way to becoming the most debilitated month for Tesla stock, with a 36% plunge in shares. Moreover, this dismal performance surpasses even March 2020’s 22% dip due to pandemic concerns. It appears that investors are not expecting much from Tesla as we head into 2022.
With well-known automotive corporations ramping up their competition, Tesla’s market dominance is in peril. Unsurprisingly, the company’s stock price has been affected by this increased rivalry.
Analysts told Bloomberg that the EV startup’s highly anticipated driving software and battery technology are falling behind schedule, while the avant-garde design of the Cybertruck may make it an unappealing choice for mainstream drivers.
Despite tech shares feeling the weight of the Federal Reserve raising interest rates to rein in inflation, and stoking fear of a possible recession, Tesla’s stocks are experiencing some of the bigger losses due to concerns that demand for pricey electric vehicles could decrease.
To exacerbate the apprehension, Elon Musk’s acquisition of Twitter for $44 billion caused individuals to question his commitment to Tesla. Furthermore, selling Tesla shares worth almost $40 billion to finance the transaction only added fuel to the fire.
A few days back, Musk verified he would no longer serve as CEO of Twitter but failed to provide a timeline. His remarks did not result in an immense surge in Tesla’s stocks.
On December 22, despite the stock’s cataclysmic crash from twelve months prior, Tesla remained the largest automotive manufacturer in terms of market capitalization at $396 billion – a sum over twice as large as Toyota, who occupies second place.