Tesla had a bad 2022.
It was a real nightmare in the stock market.
Tesla shares have lost more than 65% of their value to end the year at $123.18. In 2022, it started at $352.26. More than $720 billion in market capitalization evaporated in one year this fall, turning into a real disaster for shareholders.
Elon Musk, the carmaker’s whimsical and charismatic CEO, attributed the stock market crash to macroeconomic and geopolitical factors.
“Macro conditions are difficult: energy in Europe, real estate in China and crazy Fed rates in the US,” the billionaire explained on December 8.
Macro vs. Twitter
Europe is experiencing an energy crisis due to the ongoing war between Russia and Ukraine, which is affecting economic activity. The Federal Reserve, or Fed, has been aggressively raising interest rates for months in an effort to crush inflation, which has reached its highest level in four decades. This monetary policy increases the fear of a so-called hard landing, that is recession, for the economy.
If Techno King’s analysis is to be believed, many individual Tesla shareholders (TSLA) – Get a Free Report However, they believe that the loss of shares of the stock exchange is related to the actions taken by the CEO after buying the social network Twitter.
On December 16, individual shareholder Ross Gerber lamented, “Elon has now wiped $600 billion off Tesla and still has nothing from the Tesla Board of Directors. This is totally unacceptable.”
That criticism led to a back-and-forth between him and Musk.
“Tesla is doing better than ever! We don’t control the Federal Reserve. That’s the real problem,” Musk replied.
But Gerber insisted: “I agree that the Fed is wasting a lot of time and the macro is getting worse. But tesla is doing very well and should outperform its tech peers like Apple…should be at least 2x apple PE. On a bad day, tesla should be $250 a share.”
Three days later, with Tesla’s stock still falling, Gerber asked the board to find a new CEO.
On December 20, Gerber wrote: “Tesla stock price now reflects the value of having no CEO. Great job tesla BOD – In a time of turmoil.”
Tesla was influenced by Twitter
Critics of the billionaire believe that Tesla’s defeat is due to his purchase of Twitter. The tech mogul decided to buy Twitter to turn the platform into a place of free speech, he said. The tech mogul has focused exclusively on Twitter since making a takeover bid for the social network on April 22.
He is everywhere on the platform, attacking his perceived enemies and regularly creating controversy. The problem is that Tesla’s stock continues to fall after its $44 billion bid for Twitter. Musk finalized the deal less than two months ago on October 27. Tesla’s stock has lost about 39% of its value in that short period of time.
“Over the past year, we’ve seen the Tesla brand lose equity in every brand value, from basic safety to refinement,” said Alexander Edwards, president of research-based consulting firm Strategic Vision. “These problems are exacerbated by the fact that battery electric vehicles (BEVs) are increasingly being bought by self-identified Democrats who oppose Musk’s moves on Twitter. Tesla’s will become harder to sell as Twitter’s narrative makes the vehicles less visible. away”.
In this context, Dan Ives, Wedbush’s star analyst and one of Tesla’s most optimistic, believes that it is possible to break out of this negative spiral. He listed 10 things Musk, who said he was just stepping down as CEO of Twitter, should do in 2023 “to change the negative sentiment around the Tesla story.”
To Do List
”Name Twitter’s CEO by the end of January,” advised Ives. “Stop the stock sell-off and no more wolf or Pinocchio-screaming boy,” and “officially adopt a 10b5-1 plan so investors know there isn’t a big selling block around the corner, as Musk sold nearly $40 billion of TlSA stock last year.”
Analyst Mask recommends setting “conservative delivery and targets for 2023 with a darker macro outlook. In our view, a 50% growth target is not achievable, 35%* delivery growth is a more effective and realistic target for 2023.”
The billionaire also needs to refocus on Tesla because Musk is “Tesla’s heart and lungs and vice versa,” Ives said.
”Announce Cybertruck deliveries by the end of 2023. Timing is of the essence here with competition on all fronts and concerns that production issues will push it into 2024,” Ives suggested.
In addition, the analyst recommends some changes in the Board of Directors. New additions should have experience in technology and EV management.
Tesla should also announce a share buyback program to restore market confidence: “With shares at these levels, given the large treasury, it’s not the smartest strategic move for Tesla in our view,” Ives argued, adding that the company is also more should be transparent. around its margin structure.
Ultimately, Ives said, Musk should be less political because “the more political Musk gets on Twitter, the worse it is for selling EVs to the masses. It’s that simple, and that remains a major concern of investors.”
“Make a strategic plan for Twitter,” the analyst wrote. “The very simple fear right now is that Twitter is running away from advertisers and shedding money (right now) which means more losses and therefore more Musk selling TSLA stock. Once the new CEO is in place, figure out Twitter’s 3-year strategy and what that is.” may be, Super App, ‘X’, WeChat 2.0, etc.”
The billionaire has not yet reacted to the analyst’s advice. However, he is sure he heard the message.