Tesla’s share price has dropped to its lowest level in more than two years as a result of the electric car manufacturer’s ambitions to shorten its production cycle and investors’ concerns regarding Elon Musk’s time commitment to running Twitter.
This week Musk emailed Tesla staff telling them not to be “bothered by stock market craziness” and that Tesla will be the most valuable company on Earth in the long-term.
“Please go all out for the next few days and volunteer to help deliver if at all possible. It will make a real difference!” he said in the email.
“Btw, don’t be too bothered by stock market craziness. As we demonstrate continued excellent performance, the market will recognise that,” he said.
“Long-term, I believe very much that Tesla will be the most valuable company on Earth!”
The market value of the automaker was destroyed in 2022, losing $720 billion (£599 billion). Tesla shares hit a low of $108.71 (£90.45) per share on Wednesday, down from a high of $407.36 (£338.93) per share in November 2021.
The price of a share has dropped 70% over the course of the year, putting it among the five companies with the biggest loss of value among the S&P 500 Index in 2022.
Tesla’s share price losses far outperformed the Index’s benchmark loss of 20%, which occurred as the value of US stocks fell over the course of last year.
After ending his legal dispute on the purported prevalence of bot accounts on the site, Musk assumed control of Twitter in October. He paid approximately $44 billion (£36.6 billion) for the company. During his tenure, the site’s operations underwent a redesign and thousands of jobs were eliminated.
Investors worry that the acquisition has monopolised the attention of the former world’s richest man, who recently assumed the position of CEO of Twitter.
Tesla’s fortunes have been mixed as it intended to reduce production at its Shanghai facility, but it also continued to generate profit, recording $3.3 billion (£2.74 billion) in profit in its most recent earnings report for the third quarter of 2022.
But despite producing a record number of cars, the manufacturer fell short of its output goals for the third quarter of last year.
Given the rise in COVID-19 cases in China, where several of Tesla’s plants are located, it is anticipated that it will take some time for manufacturing to pick up.
The company also stated in its most recent financial report that in the medium- and long-term, battery supply chain issues will be the primary barrier to the expansion of the electric car market.
Investors are equally concerned about weaker demand and increased competition in the electric vehicle market as traditional automakers migrate to EV production.
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