Elon Musk-led Tesla was knocked out of a key US stock index’s top 10 companies on Tuesday after its shares plummeted 11 per cent in just one session.
Tuesday was Tesla’s seventh day on a losing streak, its longest since 2018.
Why are Tesla’s shares nosediving?
Elon Musk’s decision to halt production at Tesla’s Shanghai factory and reports of reduced output at its key production units are being cited as immediate reasons for Tesla’s nosediving shares.
Furthermore, reports that Tesla was offering individuals in the United States a $7500 discount for its two highest-volume models didn’t impress Tesla investors in addition to the signs of slowing demand.
Musk’s Twitter takeover and Tesla’s plummeting fortunes
At the end of 2022, Tesla’s 69 per cent value has vanished amid Elon Musk’s Twitter takeover. Reports say that Musk’s related online antics have created jitters among investors.
But there remains an optimism as far as Tesla’s innovation curve in concerned.
“Despite the stock’s performance, Tesla’s innovation curve appears to be accelerating, a stark contrast to other large tech companies whose incremental product updates appear stagnant at best,” Bloomberg reported, citing Canaccord Genuity analyst George Gianarikas’ note last week.
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