Elon Musk Says He Warned Investors Tesla Stock Was Too High As Shares Fall 41%
Tesla is currently trading at around $715 per share. That’s is after a couple of particularly good days for the EV maker’s stock with shares up more than 15%. However, since its all-time high of $1222 per share, hit back in November 2021, Tesla shares are still down 41%.
Tesla’s stock is no stranger to volatility however, the recent pull back in the stock price has been particularly stinging given the record delivery and profit numbers the EV maker has reported.
Yes, a big reason for Tesla’s stock going down is the overall macroeconomic environment. With inflation approaching double-digit numbers and the Federal Reserve hiking interest rates, most of Tesla’s peers have also seen a sharp decline in stock price.
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For example, the NASDAQ is down more than 30% and most growth companies are trading around their 52-week lows. However, what makes Tesla’s decline particularly interesting is that it seems to be trading up and down based on CEO Elon Musk’s actions.
Of the total 41% percent decline, 35% percent of that happened after April 14. That is when Elon Musk announced his intention to acquire the social media giant, Twitter.
Tesla’s stock also had a particularly bad day losing over $70 billion in value after Musk was accused of sexual misconduct. At the time I reported on a suspiciously large Tesla short position which made a 1400% profit in a day following Musk’s allegation.
Given the rough time Tesla’s stock is having, a number of the EV maker’s investors have started to blame Musk for their losses. Some have even gone so far as to claim the biggest problem with Tesla is Musk.
Having witnessed this sentiment, Tesla investor and enthusiast Whole Mars Catalog wrote on Twitter saying “major eye roll at shareholders hating on the guy who made them rich just because the market had a downturn. “It’s all Elon’s fault!” He told you the stock price was too high. He told you recession was coming. Why you ignore then get mad at him?”
Major eye roll at shareholders hating on the guy who made them rich just because the market had a downturn.
“It’s all Elon’s fault!”
bro. he told you stock price was too high. he told you recession was coming. why u ignore then get mad at him lol
— Whole Mars Catalog (@WholeMarsBlog) May 25, 2022
Musk saw this tweet and responded by saying “indeed I deed”. In the face of it, Musk is absolutely right, he did warn Tesla stock was too high and he also said last year he expects the economy to be in a downturn starting in the spring of 2022.
However, in my opinion, what Musk doesn’t understand is people are frustrated given Tesla’s amazing performance as a company while at the same time losing so much value due to his Twitter deal and personal life.
Having said that, Musk still threw a bone at frustrated Tesla investors reiterating his long-held belief that Tesla will be the most valuable company in the world.
Musk added saying “however, I also think that Tesla has the potential to be the most valuable company ever. When Tesla’s market cap, making sustainable energy products, exceeds that of Aramco, producing fossil fuels, you know the future will be good for Earth.”
Indeed I did.
However, I also think that Tesla has the potential to be the most valuable company ever.
When Tesla’s market cap, making sustainable energy products, exceeds that of Aramco, producing fossil fuels, you know the future will be good for Earth.
— Elon Musk (@elonmusk) May 25, 2022
Aramco, if you happen to be unfamiliar, is currently the largest oil producer in the world and is majority owned by the Kingdom of Saudi Arabia. Aramco is also the biggest company in the world by market cap and is valued at around $2.5 trillion.
In comparison, after Tesla’s recent stock price pull back, the EV maker is now valued at around $740 billion. Meaning if Tesla surpasses Aramco as Musk hopes, it will be another 3 fold increase in Tesla shares.
By setting the goal this high, Musk appears to be saying to Tesla investors to hold on and come with him on this ride.
Given Musk’s recent shenanigans some investors might be wary of his promises. However, it pays to remember those investors who hanged on during Musk’s “funding secured” drama, and the following 50% crash in Tesla’s stock made up for their losses in a few months and are now up more than 7X in their Tesla position.
As of now, Musk’s Twitter deal seems to be priced in Tesla’s stock and the EV maker has started to recover. However, things can change in an instant in Musk's world. And we will be sure to keep you posted as things change.
Until then, make sure to visit our site torquenews.com/Tesla regularly for the latest updates.
So what do you think? Surprised to hear Musk say he warned Tesla investors of the coming crash? Also, who do you blame for the recent pullback in Tesla shares? Let me know your thoughts in the comments below.
Image: Courtesy of Tesla
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Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.