Tesla is the most valuable company in the world, and everyone from regular people to wealthy investors has an opinion (and maybe even a few shares) of the company. Over the years that Tesla has been around, there have been a lot of good and bad changes and rumors about it.
Because of this, public opinion about the company could be more stable, and as a result, the stock price has been all over the place over the years. Today, we’ll examine why Tesla’s share price dropped so much and where it stands now. Let’s get started.
Achieving great heights
Before we talk about how Tesla’s stock price got to where it is now, it’s important to know how it got there in the first place. For most of its history, Tesla traded almost horizontally, meaning its price changes were small and stable. In 2017, when Tesla went public for the first time, each share was worth about $20. This stayed the same until the end of 2020 when things started to get interesting.
Tesla’s rapid growth through 2020 isn’t caused by just one thing but by several. First, there are its prices. Tesla had a big day on January 10 when it was given a value of $86 billion, which was a record for US automakers. In June, just a few months later, Tesla was worth around $180 billion on the market.
At the same time that these estimates were being made, Tesla was putting out cars in large numbers for the first time. Before this, there had been deliveries, but the company was beginning to grow. Delivery of the Model Y started in March 2020, and the first car with a range of 400 miles was announced. By the end of 2020, shares were worth more than $235.
Even more, many retail investors (people not part of an institution) poured money into the company because it was popular. Because of this rush of buyers, Tesla was able to do better than the over $40 billion in shorts (people betting against the company via the stock market). When these shorts ran out, the stock went up even more. This is called a “short squeeze.”
Going into 2021, it looked like Tesla would have a great year. By June, the first Model S Plaid cars were being supplied, hundreds of thousands of Model 3s were being delivered, and the company was going to open Gigafactories left and right. Once October came around, and people started spending more money again after the pandemic, Tesla’s stock started to grow.
On October 25, Tesla was worth $1 trillion, and a share of its stock cost more than $350. The company moved its headquarters to Texas in December, but it kept sending out tens of thousands of cars every quarter. But this was the highest point Tesla would reach before it started to fall. Before November and December, Tesla’s share price had reached an all-time high (ATH) of more than $400. From here, things got worse.
Why did Tesla’s stock begin to fall after November 20, 2021?
Doesn’t everything that goes up has to come down? Well, as 2022 began, Tesla’s stock price began to drop for the first time in a real way. Again, there are many reasons why the price went down. Instead, it was a combination of outside events, problems within the company, and bad press.
World events are the most important reason Tesla’s price has been decreasing. The first big drop for Tesla and most other companies began in 2022. In 2020, there was a war between Russia and Ukraine; interest rates went up, demand went down because a recession was coming, and there were problems with the supply chain. Each of these has had a big effect on Tesla and the market as a whole.
A Chief Executive Officer Who Is Distracted
On top of problems on a global scale, worries about the company’s (in)famous CEO kept growing. Musk has always been a bit of a lightning rod, but what happened on Twitter recently seemed to make investors even less confident in his ability to steer Tesla, which is worth $650 billion.
Musk said he wanted to buy Twitter in the year’s second half of the year. The deal is now official, but only with a little noise from both sides. For many investors, Musk already had a lot on his plate with SpaceX, Tesla, Neuralink, and The Boring Company. Adding Twitter to that list could be the company that breaks the CEO’s back.
Tesla: New Hope
Even though there has been a lot of worry about The Tesla stock and price, it’s important to point out that the company’s numbers for the year have been very strong and stable. Even though there has been a lot of worry about “Russia this” and “bear market that,” the company’s sales and deliveries have been quite strong.
The current stock price shows some worries about the company, but it’s clear that things aren’t going to slow down soon. Even though Tesla’s share price went down a lot in 2022, they will still make more electric cars, batteries, and anything else Musk comes up with than anyone else in the world.
Since this was all high almost a year ago, Tesla’s price has dropped by almost 50%. Most likely, this was because of global worries and events, less trust in CEO Elon Musk, and less consumer spending going into 2023.
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