The news stoked investor concerns about weak demand for electric vehicles, especially those that are more expensive and may not be eligible for U.S. government tax breaks or other incentives. Panasonic’s batteries are used in Tesla’s earlier, more expensive Model X SUV and Model S sedan.

During Tesla’s third-quarter earnings call on October 18, CEO Elon Musk reminded shareholders that high interest rates have put tremendous pressure on the company, forcing electric vehicles to keep prices low , could hinder consumers’ ability to buy or lease electric vehicles.

Musk has also repeatedly said that Tesla faces tougher challenges as the much-anticipated electric pickup truck CyberTruck enters production. He lamented not long ago: “CyberTruck is us digging our own grave.”

Musk also said on the call: “I just want to temper people’s expectations for CyberTruck. It’s a great product, but from a financial perspective, it will take 12 to 18 months before it becomes a significant cash flow.” Contributors.”

Tesla shares have fallen more than 18% since that call. Tesla shorts made $3 billion between that day and last Friday’s close, according to data from London-based financial information services firm Ortex. As of October 27, Tesla shorts were worth approximately $18.08 billion, accounting for 3.21% of the free float.

U.S. investment bank Bernstein analyst Toni Sacconaghi wrote in a research note to clients on Monday that the company expects Tesla’s “margins to decline and sales to decline in fiscal 2024.” disappointment”. Bernstein expects Tesla’s stock price target to be $150 over the next 12 months.

Although Wall Street expects Tesla to deliver 2.3 million vehicles next year, an increase of about 500,000 vehicles year-over-year, Sacconaghi wrote: “To increase deliveries of 500,000 vehicles, Tesla will have to cut prices by approximately 16 %, which would reduce overall operating margins by 750 basis points. It is unclear whether Tesla will cut prices further to drive enough demand growth without causing negative free cash flow. We believe Tesla will Deliveries may be lower than market expectations and face lower profit margins.”

Bernstein has a pessimistic view on Tesla, expecting Tesla to deliver 2.15 million vehicles and diluted earnings per share of $2.59 next year, while the market consensus is that it will deliver 2.3 million vehicles and earn $3.30 per share. .

This pessimism is spreading across all sectors of the EV market. Shares of ON Semiconductor, which supplies chips for electric vehicles, plunged 20% on Monday after the company gave disappointing fourth-quarter guidance.

Tesla shares fell to $197 as of Monday, down nearly 5% from Friday’s closing price of $207. In less than five hours of trading, $7 billion was wiped off the value of 715 million shares and vested options held by Musk.

After the stock market closed on October 17, Musk announced disappointing third-quarter earnings and poor fourth-quarter guidance, exacerbating Tesla’s share price decline. Since then, Tesla’s stock price has fallen 23%, wiping out $189 billion in market value, and Musk’s personal wealth has shrunk by $41 billion.

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Source: Tesla website

Cathy Wood’s interview is as follows: “We predict that Tesla will be worth $2,000 per share in 2027. In a bear market and bull market environment, Tesla’s share price will fluctuate between $1,400 and $2,500.

Another expert on the show with Cathy Wood thought she had misheard, and this was more than ten times the current price of Tesla ($163). Cathy Wood then reinforced this view and argued that Tesla’s Robotaxi programme was a huge opportunity that would drive the share price up.

Kathleen Duddy-Wood, an American financial analyst and entrepreneur who is currently CEO and President of Investments at Ark Capital is widely known for her investments in disruptive and innovative technology companies and the high returns of her funds, and is nicknamed the “Goddess of Technology Stocks”.

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Regulatory filings show that Musk holds about 411 million shares of Tesla stock, of which 238.4 million shares are pledged to obtain personal loans. Based on Tesla’s closing price of $185.06 on Thursday, those pledged shares are worth about $44 billion. Under Tesla’s previous policy, Musk could theoretically raise up to $11 billion in debt (currently about 75.68 billion yuan).

On Thursday, Tesla’s board amended its policy on pledged shares to specifically limit the total amount Musk could borrow against his shares to the lesser of $3.5 billion (currently about RMB 24.08 billion) or 25 percent of the value of the stock. Previously, Musk was not subject to such restrictions. The new policy also reduces the maximum amount that Tesla directors and executives (other than Musk) can borrow against the pledged stock to 15 percent of the value of the stock, down from 25 percent previously.

“In order to reduce the risk of being forced to sell a pledged stock, the Board of Directors has established a policy that limits the pledging of Tesla stock by our directors and officers,” Tesla said in the filing. The company noted in the proxy statement that the number of shares pledged “does not indicate the extent to which there may be actual borrowings on those shares as of that date, and the borrowings may be substantially less than the value of the pledged shares.” it

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Yet despite this, Elon Musk assured investors in the electric car maker that while Tesla is prone to short-term volatility, the company itself stands on solid ground. Elon Musk responded to a post from a group of Tesla owners in Silicon Valley, which noted that numerous bulls have been affected by the decline in Tesla’s stock in recent weeks. Elon Musk noted that Tesla’s fundamentals are actually really good.

“Long-term fundamentals are very strong. Short-term market craziness is unpredictable,” Elon Musk wrote.

As if to underscore his point, Elon Musk asked people to take his comments to heart in a later tweet, “Please take these two sentences to heart completely!”

Some of the notable drops in Tesla’s stock price this year came after Elon Musk decided to sell some of his stake in the electric car maker to support its acquisition of the social media platform Twitter. Elon Musk also recently noted that he no longer plans to sell any more Tesla shares for at least 18-24 months.

Opinions of the electric car maker are currently polarized, with some bullish analysts on Wall Street, such as Wedbush’s Dan Ives, who currently has an Outperform rating on Tesla, calling for a significant change in Elon Musk’s leadership style at Tesla and Twitter over the next year to address the negative sentiment surrounding the electric car maker.

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According to data from S3 Partners, the sharp drop in Tesla’s stock price has brought huge profits to short-sellers. The short-sellers have made about $17 billion in profits on Tesla’s stock, and Tesla will become the profit maker for 2022. The most abundant shorted stocks.

In December alone, Tesla’s stock price has fallen as much as 37%, and it has fallen by nearly two-thirds this year. The company’s capital market value has evaporated by $670 billion.

Such a dilemma is a 180-degree turn for Tesla stock. You know, Tesla used to be one of the stocks with the highest gains during the global new crown epidemic. In 2020 alone, stimulated by the rising demand for electric vehicles and the Federal Reserve’s low-interest rates, Tesla’s stock price rose by 740%.

These short-selling institutions often buy a large number of Tesla’s shares, betting that Tesla’s stock price will fall, so as to obtain huge profits. The return rate of Tesla short-selling institutions this year is as high as 89%, which is a rare victory for these institutions against Elon Musk.

According to reports, at some point in 2018, about one-third of all of Tesla’s outstanding shares were held by short-selling institutions. Well-known short-selling Tesla investors include Jim Chanos (Jim Chanos). Chanos, David Einhorn, and Andrew Left.

The bearishness and siege of Tesla stocks by short-selling institutions angered Elon Musk. He vowed to let the short-selling institutions suffer retaliation from the market. Later, Tesla’s stock price rose and the short-selling institutions suffered heavy losses. Elon Musk quickly let Tesla La Co. makes and sells panties (priced at $69,240) to poke fun at short sellers (“pants” and “short” are the same word in English).

Later, as Tesla’s stock price skyrocketed, some short sellers exited the market one after another. According to data from S3, only 2.9% of Tesla’s total outstanding shares are held by short sellers today.

Ihor Dusaniwsky, an analyst at S3, said that before Tesla’s stock price creates a new bottom, the selling climax of the short side will continue.

However, where is the bottom of Tesla’s stock price? This question has Wall Street analysts and investors scratching their heads. However, Tesla’s stock price may face a turning point. For example, the company will release electric vehicle deliveries for the fourth quarter of this year early next month. In order to stimulate sales, Tesla recently offered discounts in markets such as the United States and China.

On Thursday local time, Tesla’s stock price rose sharply by 8.1%, rebounding for two consecutive days. In the seven days prior to this, Tesla’s stock price plummeted by 31%, but there are now signs of stabilization. The last two days have also become a rare consecutive rise in Tesla stock in more than a month.

Recently, Adam Jonas, an analyst at American investment bank Morgan Stanley, said in a research report that Tesla’s stock price has plummeted recently, and attractive opportunities for investors have emerged.

For Tesla stock, Jonas gave a buy rating. Taking into account the current decline in stock prices and the decline in the market value of the entire company, Jonas lowered Tesla’s target stock price. However, the analyst also emphasized that in 2023, Tesla will continue to expand its lead in the electric vehicle market.

Dusanisky, an analyst at the above-mentioned S3 company, said that although Tesla’s stock price has shown signs of rebounding, the stock’s “notorious” volatility will still exist in the future.

The analyst said that if Tesla’s stock price starts to rise, there will be a very violent short-covering (short institutions buying stocks), and their purpose is to lock in the short-selling profits realized before the stock price rises further. This operation will also make the stock price rise further.

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Tesla

No more stock sales
In a Twitter Spaces audio chat yesterday, Elon Musk said, “I’m not selling any stock for at least the next 18 to 24 months, so you can expect me not to sell the stock until 2025. I need to sell some stock (before) to make sure I have backup capital for the worst-case scenario.”

This isn’t the first time Elon Musk has promised not to sell more Tesla stock this year. In August, after selling more than $8 billion worth of Tesla stock to fund the Twitter acquisition deal, Elon Musk tweeted, “No further plans to sell Tesla after today.” Earlier this month, however, he sold another $3.6 billion in Tesla stock. By yesterday’s close, the stock had fallen to a 52-week low.

Elon Musk

Elon Musk, meanwhile, also offered his own take on the macroeconomy, expressing pessimism about the overall economic outlook for the year ahead. “From a long-term perspective, this is a natural economic cycle, and frankly, we’re long overdue for a recession,” he said, adding, “Shockingly, we haven’t experienced any major recession since 2009.”

Still focused on Tesla
Some investors fear that Elon Musk has moved away from his role as CEO of Tesla as he shifts his focus to Twitter, further contributing to the decline in Tesla’s stock price. Elon Musk, however, said he has “not missed a single important meeting” at Tesla since taking the helm of Twitter. He told listeners in a Twitter Spaces chat that he sold Tesla shares because he was “a little paranoid and went through two really bad recessions.

Stock buyback
Elon Musk also said Tesla’s decision on a stock buyback program could depend on the severity of the recession. “Are we talking about a mild recession, a moderate recession or a severe recession? We don’t know yet.” He said.

In October, Elon Musk said Tesla could make $5 billion to $10 billion in stock buybacks and said it was likely to make meaningful buybacks. The company has discussed such stock buybacks at the board level, but has not yet approved the plan, he said.

“The board is very open to stock buybacks,” Elon Musk said in the chat. He added, however, that “it would not be wise to do a buyback and then find that the recession is worse than it was in 2009.”

New super factory
Elon Musk revealed that Tesla is close to finalizing the site for another superfactory, but did not disclose details.

Elon Musk has said that Tesla could open 10 to 12 new factories to help increase Tesla’s sales to 20 million units by 2030.

He also said Tesla plans to start refining battery-grade lithium at a plant in Corpus Christi, Texas, in about two years to help the company meet its demand for the material it needs for power batteries.

Tesla shares fell another 8.88 percent yesterday. In response to investors’ concerns, Elon Musk said, “The company’s ability to actually execute is excellent.”

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According to statistics from Forbes magazine, Elon Musk’s current net worth is $194.8 billion (about 1.41 trillion yuan), a large part of which comes from his nearly 15% Tesla stake. Since Elon Musk announced his bid for Twitter in April, Tesla’s market value has evaporated by nearly half, and his own net worth has shrunk by $70 billion, dropping below $200 billion.

Tesla’s No. 5 spot in the S&P 500 has just been replaced by veteran economic giant Berkshire Hathaway as its market capitalization evaporates. At Tuesday’s close, Tesla had a market value of $604 billion.

Before that, Elon Musk had sold at least $15 billion worth of stock. Last month, he completed a $44 billion acquisition of Twitter with a $13 billion loan and a $33.5 billion mortgage on Tesla shares.

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As Electrek reported at the time, very little was known about the investor and his wealth. A graduate of Columbia University and New York Law School, he founded Software House International (SHI), a large IT company. Since this is a private company, it is difficult to value it, but it must be very valuable because it enabled Kaiwon Liao to invest billions of dollars in Tesla.

Last year, Liao Kaiyuan reportedly owned 6.2 million shares of Tesla stock, equivalent to 18.6 million shares after the stock split last month. At the time, he said he continued to buy Tesla stock and planned to invest billions of dollars more.

But another interesting thing about Liao Kaiyuan is that he certainly has a lot more money invested in Tesla at the moment than Elon Musk, even though he owns fewer shares than Elon Musk. At this point, he believes he has invested more money than Elon Musk and Ellison combined.

He disclosed 22.6 million shares of stock, so he kept his promise to invest more in the company. These more than 4 million shares of Tesla likely cost him about $1 billion.

On top of that, Kaiser Liao disclosed buying about 104,200 shares of Tesla’s stock in the past week.

If you think he’s lying, Tesla’s head of investor relations actually confirmed his past Tesla positions. Now, as for his claim that he has more money invested in Tesla than Elon Musk, that is most likely accurate. While it’s hard to determine how much money Kaiwon Liao has invested in Tesla, it looks like it’s at least $2 billion.

As for Elon

Elon Musk, it is also difficult to confirm how much money he has invested in Tesla, as he was the first outside investor in the company before it went public. He reportedly invested $6.5 million in the first Series A round of financing.

He has participated in every other round of financing since then and is believed to have invested about $70 million of his own money in Tesla prior to the company’s IPO. During Tesla’s IPO, the company raised several secondary financing rounds, some of which Elon Musk participated in for about $100 million.

As a result, Elon Musk may have invested less than $200 million of his own money into Tesla, making it one of the best investments ever made, as his stake in the company is now worth nearly $200 billion.

As for Oracle founder Larry Ellison, he disclosed an investment worth about $1 billion when he became a member of Tesla’s board of directors. Arguably, he got that position at Tesla for an investment of less than $1 billion. It’s hard to say now how much Tesla stock Ellison owns because he is no longer a member of Tesla’s board of directors. Unless he recently went on an undisclosed Tesla buying spree, it’s safe to say he doesn’t have as much money invested in Tesla as Kaiwon Liao.

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Tesla stock price

This bold analysis is largely based on skepticism about Tesla’s Autopilot technology, which according to data released by the National Highway Traffic Safety Administration (NHTSA) shows that from June 2021 to May 15, 2022, there were 273 accidents involving Tesla Autopilot, accounting for nearly 70% of the 392 accidents involving the advanced assisted driving system. In addition, the analyst believes that Tesla’s stock has a forward P/E ratio of 76 times, which does not take into account the intensification of the economic slowdown.

He writes in the report, “We believe current valuations remain challenging, with a handful of other companies that have previously reached Tesla’s current market cap reaching an average of ~$100 billion in gross profit, compared to Tesla’s estimated annualized ~$30 billion in the second half of 2022 ($20 billion in the first half). And in the context of the current macro situation, it’s important to note that Tesla is expanding production capacity for the Model Y, a car that sells for about $60,000 in the U.S. market, yet the U.S. market is already relatively small and other electric vehicles are increasing.”

Meanwhile, Tesla came up with strong arguments to justify the current valuation of its stock: sales in the second quarter rose 43 percent year over year to $14.6 billion. Operating profit jumped 88 percent year-over-year to $2.5 billion.

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