Shares of Tesla fell 12% on Tuesday, wiping nearly $50 billion from the company’s value and prompting an investigation into CEO Elon Musk, as spotlighted on Twitter.
The losses exacerbated a slide that had been going on for months. Tesla shares have halved since Musk acquired Twitter in late October. The company has lost nearly three-quarters of its value since last January, when Musk began investing in Twitter.
Shares of Tesla rose nearly 3% in early trading on Wednesday, recouping some of the losses.
The sharp drop this week followed a disappointing sales report for the final three months of 2022 that fell short of Wall Street expectations. Tesla delivered 405,000 vehicles from October to December; analysts expected 420,000 deliveries.
In total, Tesla sold just 1.3 million vehicles last year, a 40% increase over the previous year. This figure fell short of Tesla’s 50% annual sales growth target.
The latest blow deepened some of the concerns already plaguing the automaker. Tesla is facing recession fears and falling demand amid rising interest rates, increased competition and production problems caused by the pandemic.
In addition, some analysts and major investors have criticized Musk for not focusing on Tesla, saying the company needs leadership as it battles a negative business environment.
“We all know Tesla management needs to be 100% focused right now,” said Ross Gerber, CEO of Gerber Kawasaki Wealth. & Investment Management, he tweeted Tuesday.
Gary Black, managing director of investment firm Future Fund, he said on Monday in response to the company’s latest sales report: “There’s no way to sugarcoat it.”
Tesla and Elon Musk did not immediately respond to ABC News’ request for comment.
In the past, Musk attributed the decline in stock prices to rising interest rates, which typically benefit depositors who profit from the higher interest rates that bank accounts bring.
“As guaranteed bank savings account interest rates begin to approach non-guaranteed stock market returns, people will move more and more of their money out of stocks and into cash, thus driving stocks lower,” Musk said. he said last month in response to concerns from a prominent Tesla investor.
Musk announced at the end of last month that he will step down as the head of Twitter after the company has identified a successor.
The world’s richest man has sold nearly $40 billion worth of Tesla stock since the end of last year, including a $3.6 billion sale last week.
The sales reduced Musk’s stake in Tesla, raising questions about his continued level of involvement with the company.
After acquiring Twitter, Musk made dramatic changes. He fired senior managers and cut the company’s 7,500-strong workforce in half, restoring some previously suspended accounts.
For his part, Musk defended his actions on Twitter as part of an aggressive effort to save the company from financial peril, which he described in an interview with Twitter Spaces in December as an “emergency fire drill.”
“That’s the reason for my actions,” he said. “They can sometimes seem fake or weird or whatever.”
In an interview last month, Musk promised to stop selling Tesla stock until at least 2024, even though he had previously broken his commitment to stop selling shares. He insisted he hasn’t missed “a single important Tesla meeting” since acquiring Twitter.
Tesla remains the top-selling electric car company in the U.S., but its lead has slipped in recent months as rivals offer a number of affordable alternatives.The &P Global Mobility report showed in November.
The company had a 65% market share of newly registered electric vehicles in the US in the third quarter of 2022, down from 71% in 2021 and 79% in 2020, the report said.
In response to weakened demand, Tesla announced in December that it would discount $7,500 on Model 3 and Model Y vehicles delivered that month in the United States.
In a tweet on Tuesday, Musk acknowledged how his fortunes have changed: “12 months ago I was Person of the Year.” he said.