Tesla shares closed Thursday’s session at $125.35, down 8.88 percent from the day’s opening price. TSLA shares, however, had regained about 1.12 percent of their loss in the extended trading session. While the stock and crypto-currency market has seen a major sell-off in 2022, analysts say Tesla shares are feeling the heat of declining electric vehicle (EV) demand.
In addition, Elon Musk’s split following the Twitter acquisition has drawn mixed reactions from Tesla investors and U.S. regulators. For example, Canaccord Genuity reduced its price target on Tesla stock from $304 to $275, citing public sentiment “cosmically bad“and a shareholder base”clueless“.
“Elon Musk does things Elon Musk style“, wrote George Gianarikas of Canaccord. “Some of this is Twitter-related drama, much of it is not“.
In addition, Massachusetts Senator Elizabeth Warren recently raised concerns about Elon Musk running Tesla as a private company.
Elon Musk took over @Twitter, but he’s still the CEO of @Tesla. That raises legal concerns – is he creating conflicts of interest? Is he misappropriating company resources? Tesla is not Musk’s private plaything. I’ve got many questions for the Tesla Board. https://t.co/B028T1Yive
– Elizabeth Warren (@SenWarren) December 19, 2022
In his defense, Musk defended his role as CEO of Twitter, indicating that he will resign after finding the most qualified candidate.
“I will resign as CEO as soon as I find someone crazy enough to take the job! After that, I’ll just manage the software and server teams“, said Elon Musk.
I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software and servers teams.
– Elon Musk (@elonmusk) December 21, 2022
Tesla Shares and Market Outlook
Tesla shares are down 64% year-to-date, and have fallen about 56% in the past three months. As we approach 2023, Tesla’s market capitalization stands at about $434.41 billion, down from about $1.3 trillion a year ago.
Still, the EV maker has made huge strides in developing its ability to scale up production. Notably, Tesla has several production facilities in operation, including in China, the United States, and Germany. In addition, governments around the world are moving toward the adoption of clean energy, with electric vehicles among their top priorities.
For example, the U.S. recently passed a law called the Inflation Reduction Act, which offers EV buyers $7,500 in federal tax breaks. As such, Tesla shares have the potential to rebound in the coming quarters.
In addition, the company produced more than 365,000 vehicles and delivered more than 343,000 in the third quarter.
Elon Musk’s acquisition of Twitter impacted Tesla’s market after the billionaire began a series of stock sales. In addition, Ark Investments, led by Cathie Wood, sold a significant portion of its Tesla shares.
Nevertheless, a survey by MarketWatch shows that 43 valuations gave TSLA stock an average rating of PLUS. In addition, the survey found that the 43 valuations gave Tesla shares an average target price of $271.83.