Tesla shares fall below $150 per share, giving up all of the gains made over the past year

• Post by: Admin
• Apr 19 2024

Tesla stock fell below $150 a share, giving up all of the gains made last year, as the electric vehicle maker suffered from declining sales and steep discounts meant to lure more buyers

Tesla shares fall below $150 per share, giving up all of the gains made over the past year

Tesla stock fell below $150 a share, giving up all of the gains made last year, as the electric vehicle maker suffered from declining sales and steep discounts meant to lure more buyers

Tesla stock fell below $150 a share, giving up all of the gains made last year, as the electric vehicle maker suffered from declining sales and steep discounts meant to lure more buyers.

Shares of the Elon Musk-owned company fell nearly 4% in intraday trading on Thursday, now the third-worst week for the stock in 2024, a year that has been dismal for Tesla investors. Shares of the Austin, Texas-based company are down 12.4% this week and more than 39% this year.

Tesla Inc. shares last traded at the $150 level in January 2023.

It was also a bad year for the employees. Tesla announced Monday that it would cut 10% of its workforce worldwide, equivalent to about 14,000 jobs. The next day, Tesla announced that it would seek to reinstate Musk's $56 billion pay package, which was rejected in January by a Delaware judge who said the agreement was dictated by Musk and that The result of sham negotiations with non-independent directors was his.

At the time of the Delaware court's ruling, Musk's package was worth more than $55.8 billion, but the stock decline has reduced that value to $44.9 billion as of Friday's close, according to a filing this week Company report shows.

Tesla shares reached an all-time intraday high of $415.50 in November 2021, adjusted for a 1-for-3 stock split that took effect in August 2022.

Tesla sales fell sharply last quarter as competition increased globally, growth in electric vehicle sales slowed and price cuts failed to attract more buyers. The company said it delivered 386,810 vehicles from January to March, down nearly 9% from the 423,000 in the year-ago quarter.

Dan Ives, an analyst at Wedbush who is very bullish on Tesla shares, called the first quarter sales figures a "clear disaster."

“This is a fork in the road for Musk to get Tesla through this turbulent time, otherwise dark days could lie ahead,” Ives wrote this week.

But on Thursday, Deutsche Bank joined other industry analysts in voicing concerns about Musk's big investment in autonomous vehicles, withdrawing its "buy" rating on the company and citing Tesla's "shift in strategic priority toward robotaxi."

Wall Street expects Tesla to report a decline in first-quarter earnings next week, and many are wondering whether there is a near-term growth catalyst that would end Tesla's share price decline. Industry analysts were expecting a new small electric vehicle for the masses that would cost about $25,000, the Model 2, but last week there were reports that Musk was abandoning that project.

Musk denied the reports, but wrote on X, the social media platform he owns, that Tesla would unveil a robotaxi at an event on August 8.

Uncertainty over Tesla releasing a cheaper vehicle has changed the equation for analysts like Emmanuel Rosner of Deutsche Bank.

Such a delay would make Tesla's future more dependent on "cracking the code to full driverless autonomy, which represents a significant technological, regulatory and operational challenge." “We view Tesla’s change as a change in thesis,” Rosner wrote.

Since last year, Tesla has cut prices on some models by as much as $20,000 as the company faces increasing competition and slowing demand.

Other automakers have also had to cut production of electric vehicles and lower prices to get electric vehicles out of dealerships. For example, Ford has cut production of the F-150 Lightning electric pickup and cut the price of the Mustang Mach E electric SUV by up to $8,100 in order to sell 2023 models.

U.S. electric vehicle sales growth slowed to 3.3% in the first quarter of the year, well below the 47% increase that drove record sales and a 7.6% market share last year. Total new vehicle sales increased 5.1%, and electric vehicle market share fell to 7.15%.

In addition to this week's massive job cuts, Tesla this week announced the departure of two senior executives.

Andrew Baglino, senior vice president of powertrain and power engineering at Tesla, is leaving the company after 18 years.

Rohan Patel, senior global director of public policy and business development and eight-year Tesla veteran, is also leaving the company.