Tesla Inc. shares closed down nearly 10% on Thursday and its market value evaporated by nearly $55.8 billion after it reported a more than 20% drop in net profit for the first quarter.
In the early hours of yesterday morning, Tesla released its financial results for the first quarter of the fiscal year 2023 ended March 31, with net income attributable to Tesla common shareholders of $2.513 billion (currently about RMB 17.315 billion), down 24% from $3.318 billion a year earlier. Earnings per share were US$0.73, down 23% year-on-year.
In addition, Tesla CEO Elon Musk said the company is willing to trade lower margins for higher sales, a statement that has raised concerns among analysts.
Wells Fargo wrote in a report Thursday, “We are cautious about a price cut given Tesla’s long-term brand risk.” Wells Fargo also lowered its price target for Tesla shares to $170 from $190.
As of Thursday’s close, Tesla shares were down $17.60, or 9.75% to close at $162.99, with $55.792 billion (currently about RMB384.407 billion) in market capitalisation evaporating, leaving $51.66 billion.