Tesla Market Cap Falls Below $500 Billion for the First Time in 2 Years

Twitter Risk Emerges, Stock Drops 41%
Shares Halved Compared to Early This Year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Yujin Cho] The market capitalization of U.S. electric vehicle company Tesla has fallen below the $500 billion mark. It is the first time in two years since November 2020 that the closing market cap has dropped below $500 billion. Concerns are rising that the stock price decline will be prolonged due to an unfavorable market environment in its core business and the added negative impact of the 'Twitter risk.'

On the 14th (local time), Tesla's stock, listed on the U.S. Nasdaq market, closed at $156.80, down 2.58% for the day. The sharp drop in stock price shrank the market cap to $495.1 billion. Bloomberg reported that Tesla's market capitalization falling below the $500 billion mark is the first time since November 2020, two years ago.

Tesla's stock plummeted amid concerns over Twitter risk and the possibility of weakening demand in the Chinese market, with the stock price halving compared to the beginning of the year. Recently, news emerged that Elon Musk is considering taking out loans using Tesla shares as collateral to reduce the high-interest debt incurred during the Twitter acquisition process, which further dragged down the stock price.

This year, Tesla's stock price has plunged 55% based on the closing price as of this day. Especially since the news of the Twitter acquisition at the end of September, the stock price has dropped by 41%. During this period, the S&P 500 index rose 11%, and the Nasdaq 100 index increased by 7%.

Investors are voicing concerns that Tesla CEO Elon Musk is focusing solely on managing Twitter.

Gary Black, CEO of Future Fund, who holds $50 million worth of Tesla shares, sharply criticized on Twitter, saying, "Tesla has no CEO." He pointed out, "The Twitter controversy has made the Tesla brand terrible." Ross Gerber, CEO of Gerber Kawasaki Asset Management, directly targeted Tesla's board of directors, stating that Tesla has no management during this critical time.

The outlook for next year is not bright either. Global investment bank Goldman Sachs lowered Tesla's target stock price from $305 to $235. This is due to the expectation that while global electric vehicle supply is increasing, demand may worsen due to economic slowdown. Tesla's 2023 earnings per share forecast was lowered from $4.90 to $4.50.

Goldman Sachs diagnosed, "The risks arising after Musk's Twitter acquisition have become a negative factor for Tesla's stock price, and (because of Musk) the Tesla brand is becoming more polarized."

Earlier, market research firm Morning Consult also analyzed in a report that consumer favorability toward Tesla varies according to political orientation, stating, "Tesla is becoming a partisan brand."

Regarding criticism that Tesla's brand value has been damaged since the Twitter acquisition, Musk tweeted the day before, "I will ensure Tesla shareholders receive long-term benefits," but did not present any specific plans.

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