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Tesla lost more than 40% of its value in December and it is not certain that we are even close to the end. At the time of the Corona, the stock jumped by hundreds of percent - at the low point of March 2020.
The declines that came in 2022 were due to a variety of reasons, some related to the company, some related to the economic situation in the world and some in general due to the behavior of the CEO and founder of the company - Elon Musk.
Tesla has established itself as an electric vehicle manufacturer, with a significant portion of profits not coming directly from the sale of its vehicles. Tesla's advantage, as a manufacturer of electric vehicles only, is that it could make a lot of profit from a large amount of carbon credits it produced from the production of those vehicles. The credits came from the government and were intended to encourage American companies to move towards a cleaner energy-wise future - each company must meet a certain quota of credits for each vehicle it sells. For every electric/hybrid vehicle that a certain company sells, it can receive credits. The car manufacturers can also buy credits (if they lack them to meet the necessary quota) - Tesla benefited from the whole thing and recorded handsome profits from the matter, since it did not need such a large amount of credits.
As mentioned, the investors liked the company very much and as we have already seen - it prospered in Corona, to the extent that it became the largest car manufacturer in the world (only about two years ago did Tesla even enter the S&P 500 index). In 2022 the situation changed, investors started fleeing the stock after realizing that the pricing was too high and ridiculous.
Musk has been busy incessantly for the past year surrounding the acquisition of Twitter and investors have underestimated the amount of time and effort he has put in while he has another company to run, which he himself has said could be worth $4.4 trillion. It is not clear how one can even dream of such a value, certainly when the company's chief executive is busy with tweets and fights on his new social network.
In addition, Tesla is very dependent on China to produce its vehicles, and the fact that the country tightened its corona regulations during the year did not help. Now the government's policy is becoming more lenient, but the problem is that the number of corona infections only continues to rise and disables the activity of many businesses, including Tesla.
The economic situation in the world is not expected to improve and many now believe that the world will enter a recession in 2023, during a recession it is difficult to expect that Tesla will sell the same amount of vehicles as it used to sell in the last year, which will of course affect the performance of the stock. Last week the company came out with a sale towards the end of the year regarding some of its models in an attempt to increase the volume of sales for the last quarter of 2022 - a discount equal to at least $7,500.
In regards to Musk and Twitter, Elon launched a poll on the social network, asking users if they thought he should step down as the company's CEO. The poll's findings showed that 57% of respondents agreed. Tesla investors will have to keep watching their CEO's games while he finds a suitable replacement, as Musk promised he would only respond to the survey results after doing so.
Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
