The significant decline in value is due to several factors, including the acquisition of Twitter.
Overall, 2022 wasn’t a very good year for tech companies, but Tesla performed much worse than average, as the company has lost $672 billion in market value since the end of 2021. This represents a decline of over 63%, which is significant even though during this period Amazon lost 48% and Apple lost 27% of its value.
Several factors contributed to the company’s devaluation to such an extent, one of them being that Elon Musk sold more than $20 billion worth of stock to acquire Twitter. Buying the company and linking Musk to Twitter understandably worries investors, who fear running another major company besides Tesla and SpaceX is no longer doing well, and fear the company leader will lose focus .
Perhaps because of this, but last week Musk also launched a Twitter poll asking his followers if should resign as CEO of the social network. 57.5% of respondents chose the yes option, so Musk promised to resign “as soon as he finds someone stupid enough to take the job”.
Tesla’s market value may have declined over the past year because investors overvalued the company in light of its promise. However, reality turned out to be different from Musk’s plans, as announced individual models and products appeared three years late, which allowed Ford and Rivian, among others, to catch up.
The goal was originally to grow sales by 50% annually, but it’s already clear that even that won’t happen in 2022. The coronavirus in China and inflation and high interest rates in the US have held back the company, which to improve the numbers first offered customers a discount of $3,750 and then $7,500 in December.
After the past period, it is understandable that Musk is no longer very optimistic about next year, because in a speech last Thursday he warned that the expected recession in the US will disproportionately hit households, including the auto industry.
