What's Really Behind Tesla Stock Weakness: Musk-Induced 'Twitter Hangover' Or EV Bubble Popping? Analyst Says 'Don't Let Anybody Fool You...'
Portfolio Pulse from Shanthi Rexaline
Tesla, Inc. (TSLA) stock's recent weakness is partly attributed to Elon Musk's acquisition of Twitter, according to Future Fund Managing Partner Gary Black. Since Musk announced his intention to buy Twitter in April 2022, Tesla's stock has underperformed compared to the 'Magnificent Seven' tech stocks, dropping from $328 to around $235, a 28% decline, while the Nasdaq 100 Index rose 15%. Musk sold $15 billion worth of Tesla stock between April and August 2022, and $23 billion in total for the year to fund the Twitter purchase. Black also criticized comparisons of Tesla to other EV makers, stating that most are unprofitable and headed for bankruptcy. Additionally, Tesla's management decision to cut EV prices by an average of 18% year-over-year has not changed volume growth estimates for 2023 but has led to a 43% drop in 2024 earnings estimates. Despite these challenges, Black is optimistic about the potential 'halo effect' of the upcoming Cybertruck on Tesla's sales.
November 27, 2023 | 7:41 am
News sentiment analysis
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NEGATIVE IMPACT
Lucid Group, Inc. was mentioned in the context of its stock performance relative to Tesla, with the article suggesting that Lucid and similar EV companies are unprofitable and at risk of bankruptcy.
The article suggests that Lucid and other EV makers are unprofitable and may face bankruptcy, which could lead to negative investor sentiment and affect Lucid's stock price in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Rivian Automotive, Inc. was mentioned as part of a comparison with Tesla's stock performance, but the article suggests that other EV makers like Rivian are unprofitable and potentially facing bankruptcy.
The article implies that Rivian and other EV companies are not profitable and may be headed towards bankruptcy, which could negatively impact investor sentiment and stock performance in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Tesla's stock has been negatively impacted by Elon Musk's Twitter acquisition, with significant share sales to fund the deal and a 28% decline in stock price since April 2022. Despite this, the upcoming Cybertruck could provide a positive impact on sales.
The stock has underperformed since Musk's Twitter acquisition announcement, with a significant portion of shares sold to fund the purchase. This has likely contributed to negative investor sentiment. However, the potential success of the Cybertruck could mitigate some of the negative impact in the future.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
General Motors Corp. was mentioned for its stock performance in comparison to Tesla. The article does not provide specific details on GM's performance or outlook.
GM was only mentioned in passing as part of a broader comparison of stock performances among EV companies. There is no specific information provided that would indicate a direct impact on GM's stock price in the short term.
CONFIDENCE 60
IMPORTANCE 40
RELEVANCE 30