The share price of electric car maker Tesla fell another 9% in one day, reaching $125 per share. Moreover, at the opening of the market, the company's starting share price was $135. The head of the company, Elon Musk, promised that by 2024 he would no longer sell Tesla stock.
According to Seeking Alpha, 124 million Tesla shares were sold in the first three hours after the start of the exchange, while usually about 90 million shares are sold for the whole day. Tesla's share price has fallen 27% in the last six weeks alone and 69% since the beginning of the year.
The drop in Tesla stock comes amid complaints against Elon Musk for disparaging the company. The drop was also preceded by news that Tesla was running an (unusual step by the company) promotion for its cars in the Chinese market, and this week it also began offering discounts in North America, including Canada and Mexico. According to analysts, this is the first sign that demand for Tesla cars has declined.
According to Electrek, discounts on electric cars in the U.S. are as high as $7,500 in December, and discounts have already risen in Canada and Mexico. True, it doesn't exceed $3700 in those countries, but Tesla-like marketing behavior isn't typical of the company at all. In addition, to sell its cars in Mexico and Canada, the company is offering up to 10,000 miles of free charging at its Supercharger charging points to those who are willing to buy one of the company's cars before December ends.
Tesla CEO Elon Musk sold at least $23 billion worth of the company's stock to fund the acquisition of Twitter. According to Ortex, at least $15 billion has been spent since the beginning of the year on short positions on the stock exchange to buy these securities. This makes Tesla stock rise in 2022, making it the most profitable financial instrument for short-term investments.
The situation is somewhat exacerbated by the recent wave of accidents involving Tesla-driven electric cars, which are being investigated by regulators from the U.S. National Highway Traffic Safety Administration.
The agency is currently investigating a total of 41 accidents involving Tesla driver assistance systems, 14 of which were fatal. Included in the investigation was an incident in San Francisco in November in which a Tesla Model S sedan drove over a bridge in a highly chaotic fashion, resulting in damage to eight vehicles.
Stock market participants expect Tesla to sell between 420,000 and 430,000 electric cars in the current quarter, breaking its own record. Obviously, the aforementioned stimulus measures are aimed at achieving that goal. However, these measures are not accompanied by Musk's traditional call to employees at the end of the quarter to increase car production. According to experts, on the one hand, this indicates the successful implementation of reforms in the sphere of production activities, but on the other hand, it may indicate that Tesla has problems with the demand for electric cars in some important markets for it, including China and the USA.
Understanding the delicacy of the situation, Elon Musk promised on Twitter Spaces that he would refrain from selling Tesla stock in the next 18-24 months. Musk said he has already sold some Tesla stock in case something happens to Twitter and he has the money. However, Musk has repeatedly broken such promises in the past, and this promise is unlikely to convince investors to believe him. The billionaire continues to believe that the U.S. monetary authorities are partly to blame for the current dynamics of Tesla stock price by manipulating the refinancing rate.