Tesla suffers its worst-ever drop amid Musk's political turmoil
Tesla loses in a single session what took months to gain. Musk's political feud is taking its toll. Analysis of the drop and the opportunities.
English · Original discussion in Spanish · Published
Tesla plunges: the cost of Musk's political drift
Tesla suffered its worst trading session in years this Wednesday, with a drop some investors are calling historic. The trigger: Elon Musk's growing political involvement, which has achieved what neither the competition nor production problems could — making investors flee.
The immediate trigger was the escalation of tension between Musk and former president Trump, whom Musk reportedly accused of something serious. But the underlying problem runs deeper. Musk has been burning bridges with a significant part of his potential customer base. First he alienated the more pogre half of the market with his conservative comments. Now, by also feuding with the Trumpist right, he is left without support at either end. The result: a company trading at astronomical multiples with no justification in its sales.
The bears have been warning for a while. One investor has peine a short position at 280 dollars, convinced the floor is still far away. Others, however, see a buying opportunity: "Sweetheart deal," they say. But recent history plays against it. The Cybertruck, the big launch of recent years, has been a sales and design fiasco. Chinese competition is advancing relentlessly. And the promise of robotaxis and household robots still has no date.
It is striking that while Tesla plunges, safe-haven stocks like Telefónica — which has lost half its value since 2000 — are still defended by some as a safe investment thanks to state backing. The paradox of liberal capitalism: even a tech giant needs public oxygen to survive.
Strong hands may be playing: provoking panic to buy cheap. Or perhaps the tech house of cards is truly collapsing. The answer, as almost always, will lie in Wednesday's earnings. But if Tesla has proven anything, it is that its stock value depends as much on the balance sheets as on the mood of its charismatic CEO. And Musk's mood today is not good.
Tesla suffered its worst trading session in years this Wednesday, with a drop some investors are calling historic. The trigger: Elon Musk's growing political involvement, which has achieved what neither the competition nor production problems could — making investors flee.
The immediate trigger was the escalation of tension between Musk and former president Trump, whom Musk reportedly accused of something serious. But the underlying problem runs deeper. Musk has been burning bridges with a significant part of his potential customer base. First he alienated the more pogre half of the market with his conservative comments. Now, by also feuding with the Trumpist right, he is left without support at either end. The result: a company trading at astronomical multiples with no justification in its sales.
The bears have been warning for a while. One investor has peine a short position at 280 dollars, convinced the floor is still far away. Others, however, see a buying opportunity: "Sweetheart deal," they say. But recent history plays against it. The Cybertruck, the big launch of recent years, has been a sales and design fiasco. Chinese competition is advancing relentlessly. And the promise of robotaxis and household robots still has no date.
It is striking that while Tesla plunges, safe-haven stocks like Telefónica — which has lost half its value since 2000 — are still defended by some as a safe investment thanks to state backing. The paradox of liberal capitalism: even a tech giant needs public oxygen to survive.
Strong hands may be playing: provoking panic to buy cheap. Or perhaps the tech house of cards is truly collapsing. The answer, as almost always, will lie in Wednesday's earnings. But if Tesla has proven anything, it is that its stock value depends as much on the balance sheets as on the mood of its charismatic CEO. And Musk's mood today is not good.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (31 replies).
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