Tesla Hits 'Cheonibaeksla' Then Plummets... Musk's Brother Also Sold Shares (Summary)

Market Cap Drops 235 Trillion Won in Two Days... 'Cheonseulra' Again
Impact of Overvaluation Controversy and Electric Vehicle Competition

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] "Tesla's stock has experienced its worst plunge since September last year amid a series of setbacks."

Bloomberg News evaluated the recent shaky performance of Tesla's stock, which had surged past a $1 trillion market capitalization, earning the nickname 'Cheon-ib-seun-la' (One Trillion Tesla). Elon Musk, Tesla's CEO, also saw his brother sell nearly 90,000 shares of Tesla stock recently, earning approximately 130 billion KRW in profits. On the 9th (local time), market attention is focused on the direction of Tesla's stock, which has fallen back to the 'Cheon-seun-la' (One Thousand Tesla) level.

On that day, Tesla's stock closed at $1,023 on the US Nasdaq, down 12% from the previous trading day after hours. Tesla's stock had also fallen 4.8% the day before. After closing at $1,221 on the 5th, the stock dropped more than 16% over two days on the 8th and 9th, retreating back to the $1,000 range.

Market Cap Drops 235 Trillion KRW... Musk's Brother Also Sells

Bloomberg News reported that Tesla's stock plunge resulted in a loss of $199 billion (approximately 235 trillion KRW) in market capitalization over two days.

This decline in Tesla's stock price came shortly after CEO Musk expressed his intention to sell some of his Tesla shares. Earlier, on the 7th, Musk had conducted a Twitter poll asking whether he should sell 10% of his Tesla shares, and after a majority voted in favor, he stated he would "abide by the results."

Matt Potillo, an analyst at US investment bank Tudor Pickering, said, "Tesla's stock is highly overvalued," adding, "Musk's announcement of selling shares gave investors a reason to sell their stocks."

Meanwhile, it was revealed that current and former Tesla directors, including Musk's brother, sold Tesla shares worth hundreds of millions of dollars. Business Insider reported that Musk's brother, Kimbal Musk, exercised stock options to buy 25,000 Tesla shares at $74.17 per share on the 5th, then immediately sold 88,500 shares, earning about $108.9 million (approximately 128.3 billion KRW).

PER 66 Times That of Volkswagen... "Overvaluation Controversy"

Since the beginning of this year, Tesla's stock has shown the highest volatility among all automakers, attracting market attention.

After surpassing its previous high on the 21st of last month, Tesla's stock surged to $1,200, becoming the first in the global automotive industry to exceed a $1 trillion market capitalization. Despite the stock plunge on that day, Tesla's stock remained up 46% compared to the start of the year. Market capitalization also remained above $1 trillion.

The reason for Tesla's renewed stock decline is the controversy over overvaluation. Tesla's current price-to-earnings ratio (PER) stands at 332 times, far exceeding those of big tech companies such as Apple (26 times), Microsoft (37 times), and Alphabet, Google's parent company (28 times).

Competition Heats Up with Nvidia, Rivian, and Others

Additionally, the intensifying competition in autonomous vehicles with other companies is also analyzed as a factor contributing to the stock's downward trend. Seth Goldstein, an analyst at investment bank Morningstar, said, "Nvidia's announcement of new autonomous driving technology on that day was one of the reasons for the selling pressure on Tesla's stock." Furthermore, Rivian, an electric vehicle startup famously backed by Amazon, went public (IPO) on the same day.

Meanwhile, due to Tesla's stock plunge, CEO Musk, the company's largest shareholder, reportedly lost $50 billion (approximately 59 trillion KRW) in wealth over two days. Bloomberg News described this as "the largest drop ever recorded in history."

[Image source=Reuters Yonhap News]

This content was produced with the assistance of AI translation services.