Tesla Stock Hits 9-Month Low as Musk Controversies Continue
Shares of Tesla have dropped to their lowest level in 9 months, making it the worst-performing stock on the S&P 500 index. The decline is attributed to a combination of missed earnings estimates and increased controversy surrounding Elon Musk.
Tesla's Stock Plummets as Controversy Surrounding Musk Grows
Shares of Tesla reached their lowest point since May 2023 as the company continues to face a turbulent start to the year. The stock fell by as much as 6% to $175 before recovering slightly to a 3.7% loss by market close.
This decline makes Tesla the worst-performing stock listed on the S&P 500 index. The company's year-to-date loss now stands at 27%, a stark contrast to its fellow big technology stocks.
The drop in Tesla's stock price can be largely attributed to a combination of factors. Firstly, the company missed Wall Street estimates for quarterly profit and revenue, resulting in a post-earnings plunge. Additionally, increased controversy surrounding Elon Musk has further shaken investor confidence.
Concerns About Tesla's Governance and Musk's Behavior
One of the key concerns surrounding Tesla is its board's ability to govern Elon Musk. Recent reports in the Wall Street Journal have alleged that Musk and Tesla board members have taken illegal drugs together. These allegations have raised questions about the leadership and integrity of the company.
Furthermore, Elon Musk's behavior on his social media platform, X, has added to the controversy. Musk has used the platform to make controversial claims, including fringe-right statements, which have further fueled the skepticism surrounding Tesla's management.
These ongoing concerns and controversies have created a "black cloud" over Tesla's stock, according to Wedbush analyst Dan Ives. The negative sentiment stemming from the allegations has contributed to the decline in the company's stock price.
Tesla's Troubles in Comparison to Other Companies
The decline in Tesla's stock price is significant when compared to other companies facing their own challenges. While Tesla's year-to-date loss stands at 27%, Boeing's shares are down 21% due to safety concerns, and Archers-Daniels-Midland's shares are down 21% amid an accounting fraud probe.
It's worth noting that Tesla's stock has always been influenced by Elon Musk's actions and statements. In 2022, the company experienced a 65% selloff when Musk sold a large portion of his Tesla holdings to fund his purchase of the social media platform, X.
Unlike its peers in the tech industry, Tesla's financial performance has been underwhelming. The company's profits declined by 23% from 2022 to 2023, and analysts predict negative bottom line growth for this year as well.
