Tesla’s Stock Might Be On the Way to Another Nosedive and It Might Be Elon Musk’s Fault
Tesla maybe a leading innovator when it comes to electric vehicles and other related technologies but it isn’t immune to controversies which can affect its performance in the stock market.
Led by the enigmatic Elon Musk as CEO, the company has weathered numerous nosedives in its stock value since its entrance into the market in 2010.
And it might be headed for another one amidst after a rollercoaster of a week in the company and its controversial CEO.
Rolling Back
The automaker’s stock value has just recovered from a 13% devaluation in mid-January but veteran financial analyst Mike Khouw speculates that it’s about to go down again by 10% during the next two weeks. Khouw said that this isn’t surprising given recent events involving the company and its CEO.
Khouw’s prediction is turning out to be correct as recent news reports already mention a 9% decline in Tesla stocks since its recent but short-lived 6% increase in value.
Tesla Motors Incorporated entered the Nasdaq exchange in June of 2010 initially offering 13.3 million shares at $17 per share. Its last closing value is around $279.
Announcements from the CEO
Khouw attributes the decline partly on Musk’s latest announcements regarding changes in the company.
The first is the lowering of the selling price of the Tesla Model 3 down to just $35,000 after tax incentives from its previous $42,900 price in an attempt to diversify their vehicles and cater to more customers.
He also announced the decision to close dozens of its physical stores and eventually channel all sales to the company website. The closing of some stores, mainly in the United States, has started and will continue in the coming weeks.
But the one that fared worst among shareholders and Wall Street analysts is Musk’s announcement that the company probably won’t turn in a profit until the second quarter of the year.
Musk vs the SEC
Musk’s fascinating persona and turbulent personal relationships have also been popular topics of news involving his company.
While most CEOs tend to carefully choose their words, Musk has been criticized for his very liberal use of Twitter and has been blamed for getting his company in trouble time and again.
His latest Twitter controversy involves the Securities and Exchange Commission (SEC) which Musk called “broken” in a tweet that might have violated the terms of a settlement Musk signed last year.
The 2018 settlement resolved a fraud charge the SEC filed against Musk for “recklessly” tweeting inaccurate information ever again. Removing Musk from his position as Tesla CEO was also discussed but was deemed too risky for the company’s public image.
In the end, Tesla will most likely survive it’s stock’s recent nosedive intact but will Musk’s position as CEO weather the current storm and the upcoming ones?
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