Tesla Stock Falls Back to Levels from 2 Years Ago... "Musk to Sell More Shares"

[Image source=Yonhap News]

[Asia Economy Reporter Yujin Cho] Tesla is struggling to escape the slump in its stock price. The stock, which recently fell below the $200 mark, has plunged further to levels seen two years ago. Concerns are spreading that Elon Musk, Tesla's CEO, may sell additional Tesla shares to fund the restructuring of Twitter, which he recently acquired, leading to expectations that the stock's poor performance will continue for the time being.

On the 9th (local time), Tesla's stock, listed on the US Nasdaq market, closed at $177.59, down 7.17% for the day. This is the lowest closing price since November 23, 2020, when it hit $173.95. Selling pressure continued after the market closed, with the stock falling to $176.78 in after-hours trading.

Tesla's stock also plunged over 5% on the 7th, breaking below the $200 level. The closing price that day was $197.08, marking the first time in 17 months since June last year that Tesla's stock fell below $200.

The sharp drop in Tesla's stock price on this day was driven by concerns that CEO Musk, who recently sold a large portion of his Tesla shares, might proceed with additional sales.

Ed Moya, chief market analyst at OANDA, said, "Although Musk has already sold a significant number of Tesla shares to raise funds for the Twitter acquisition, the ongoing Twitter restructuring is expected to require substantial costs. Investors believe Musk's stock selling is not yet over."

Since the Twitter acquisition, Tesla's stock price has continued to decline, especially after Musk disclosed that he sold $4 billion (approximately 5.5 trillion KRW) worth of Tesla shares immediately following the acquisition.

According to filings with the US Securities and Exchange Commission (SEC), Musk sold 19.5 million Tesla shares from the 4th through the 9th, reducing his Tesla stake to about 14%.

Foreign media attribute Tesla's recent weak stock performance to the "Twitter risk," noting that Musk's focus on managing Twitter after the acquisition has diverted attention, negatively impacting investor sentiment toward Tesla.

Since Musk announced the completion of the Twitter acquisition on the 27th of last month, Tesla's stock has fallen more than 12%, while the S&P 500 index declined only 1.9% during the same period. MarketWatch explained, "There are concerns that with Musk as the new owner of Twitter, all attention is focused on Twitter."

Concerns are also growing over a slowdown in Tesla's core automotive business performance. Tesla's third-quarter sales volume and earnings fell short of market expectations. Amid a global economic downturn causing demand to weaken across the automotive industry, Tesla recently announced plans to reduce prices of the Model 3 and Model Y by 5-9% in the Chinese market.

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