Key Takeaways:
- Tesla stock dropped over 50% in three months, hitting $225 per share.
- Elon Musk’s Tesla stake is now worth less than his SpaceX shares.
- Short sellers made $16.2 billion betting against Tesla.
- Analysts predict the stock could fall further to $120 by December.
- Public outrage over Musk’s actions has hurt Tesla’s brand.
Tesla Stock Plummets to $225 Per Share
Tesla’s stock has had a rough ride lately. In just three months, the price dropped by more than half. As of Tuesday’s market close, one Tesla share costs just over $225. This sharp decline has shocked investors and raised big questions about the company’s future.
Elon Musk, Tesla’s CEO, is still one of the richest people in the world, with a net worth over $300 billion. However, Tesla is no longer his most valuable asset. His stake in SpaceX is now worth about $20 billion more than his Tesla shares. This shift shows how much Tesla’s value has fallen.
Short Sellers Cash In on Tesla’s Loss
While Tesla struggles, some investors are making big money by betting against the company. These investors, called short sellers, wager that a stock will drop. Over the past 90 days, hedge funds shorting Tesla have earned $16.2 billion. That’s a huge payday for those who gambled on Tesla’s decline.
Per Lekander, a hedge fund manager focused on clean energy, believes Musk has damaged Tesla’s brand. “Tesla had a very strong brand value, and Elon has managed to totally destroy it,” Lekander said. He thinks Musk has lost touch with his customers. “It’s not people with cowboy boots who buy Teslas,” he added.
Musk Loses Top Spot as Tesla’s Value Sinks
For years, Tesla was Musk’s crown jewel. But now, his SpaceX stake is worth more. This change happened quickly, as Tesla’s stock fell sharply while SpaceX’s value rose.
Tesla’s troubles don’t seem to be ending soon. Experts like JPMorgan predict the stock could fall further, possibly to $120 by December. This would be another major blow to Tesla and Musk.
Public Outrage Fuels Tesla’s Downfall
Tesla’s sales in Europe have stalled partly due to Musk’s political actions. His support for a far-right German party upset many customers. In the U.S., protests called “Tesla Takedowns” have erupted at dealerships. People are angry over Musk’s firing of federal workers and his divisive politics.
These controversies have driven more investors to bet against Tesla. Last month, the number of Tesla shares being shorted jumped by over 16%. This surge in shorting has added pressure on the stock, pushing it even lower.
A Rollercoaster Ride for Tesla Investors
Tesla’s stock has been on a wild ride. It rose from around $150 per share in early 2024 to over $400 after the election. Investors hoped Musk’s ties to President Donald Trump would boost Tesla. But as Musk’s political actions sparked outrage, the stock crashed.
Marc Cohodes, a short seller, compared Tesla and other momentum stocks to “memecoins.” He said, “When they went up, everyone buying thought they were smart. Now they’re falling, they’re causing huge damage.”
What’s Next for Tesla?
Tesla’s future looks uncertain. The stock could keep falling if public anger and investor doubts persist. Musk faces a tough challenge to rebuild Tesla’s brand and regain investor trust. Meanwhile, short sellers are enjoying their winnings, and SpaceX has taken the spotlight as Musk’s most valuable asset.
Only time will tell if Tesla can recover from this slump. One thing is clear: the electric vehicle giant is in for a bumpy ride.