'Twitter Risk'... Tesla Stock Price Returns to One and a Half Years Ago

(Photo by Reuters) [Image source=Yonhap News]

[Asia Economy Reporter Yujin Cho] Tesla's stock price has plunged below $200, returning to levels seen a year and a half ago. The dominant view is that the main cause of the stock decline is CEO Elon Musk's distraction due to the Twitter acquisition.

On the 7th (local time), Tesla's stock, listed on the US Nasdaq market, closed down 5.01% at $197.08. The market capitalization fell to $622.3 billion due to the stock price drop.

On the day before the US midterm elections, Musk posted a political tweet urging independent voters to vote for the Republican Party, causing the stock price to fall intraday to $196.66, setting a new 52-week low.

It is the first time in 17 months since June last year that Tesla's stock price has fallen below the $200 mark based on the closing price.

Meanwhile, big tech stocks listed on the Nasdaq market such as Apple, Google, and Microsoft (MS) all closed higher that day.

Foreign media pointed out that the background of Tesla's stock price decline is the growing concern over performance due to worsening external conditions in its core automobile business, while Musk is focusing solely on managing Twitter, which he recently acquired.

Since Musk announced the completion of the Twitter acquisition on the 27th of last month, Tesla's stock price has dropped more than 12%. During the same period, the S&P 500 index fell only 1.9%.

MarketWatch explained, "There were concerns that all of CEO Musk's attention was focused on Twitter as its new owner."

Bloomberg also diagnosed, "The recent decline in Tesla's stock price occurred after Musk acquired Twitter," noting that Tesla investors are worried that Musk is neglecting Tesla's management due to Twitter issues.

In fact, after completing the Twitter acquisition on the 27th of last month, Musk launched a high-intensity restructuring by firing most senior executives and half of all employees, and is trying various plans to monetize the service.

Bloomberg reported that since the automobile industry is going through a difficult time due to unfavorable business conditions such as rising raw material costs from inflation and concerns about an economic recession leading to weakened car demand, it is expected that Musk will focus on managing Tesla.

Tesla's stock price has plummeted 44% just this year. Amid the market paradigm shift toward electric vehicles, the market capitalization, which surged up to 11 times last year and once exceeded $1 trillion, has fallen to the $600 billion range.

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