Tesla stocks plummet almost 50 per cent

Publish Date
Tue, 24 May 2022, 4:17pm
Elon Musk stands in the foundry of the Tesla Gigafactory during a press event. Photo / Getty Images
Elon Musk stands in the foundry of the Tesla Gigafactory during a press event. Photo / Getty Images

Tesla stocks plummet almost 50 per cent

Publish Date
Tue, 24 May 2022, 4:17pm

Tesla has shed almost half its value since its November 2021 peak in what has been a horror few months for the company. 

The electric vehicle corporation plunged by 6.42 per cent on the stock market, then on Monday local time, Tesla shares fell by around 2 per cent. 

It's a far cry from just six months ago when Tesla shares were trading at more than US$1 trillion ($1.5t). 

For a brief moment in time, the company's founder and CEO Elon Musk himself had a net worth that surpassed US$300 billion ($466b), making him the first person in the history of the world to reach that level of wealth. 

Now, however, Musk has a net worth of almost half that, at $US209.9b ($326.1b) at time of writing, corresponding with Tesla going down in value by around 45 per cent over the last six months. 

Tesla's total losses represent around $US558.19b ($867.22b) wiped off the Tesla's market capitalisation since November last year. 

For context, however, the amount of money Tesla has haemorrhaged consists of more than the overall worth of the next five largest car manufacturers combined – Toyota, Volkswagen, BYD, Mercedes-Benz, and BMW. 

Some commentators believe supply chain issues, competition from rivals and controversies Elon Musk has become embroiled in have further spooked investors. 

Like most manufacturing businesses around the world, Tesla has been struggling to source important materials and parts as supply chains have been interrupted by Covid-19 as well as the Ukraine-Russia war. 

Rampant inflation in the US is also making materials significantly more expensive. 

Last month the S&P 500 ESG Index, a US listing of companies that are required to meet environmental, social and governance standards, deemed Tesla did not meet these standards and removed Tesla from the list. 

Elon Musk during a news conference prior to unveiling the Model X sport utility vehicle. Photo / AP 

The listing found that racial discrimination and poor working conditions in Tesla's factories meant it did not meet the stringent criteria. 

However, most have attributed Tesla's declining fortunes to the scandals of its controversial founder, Elon Musk, the richest man in the world. 

Both Musk's personal wealth and Tesla's share price is understood to have dropped since Wednesday last week, when sexual harassment allegations surfaced. 

On May 19, Business Insider claimed that in 2016 Musk exposed himself to a flight attendant on a SpaceX private jet, rubbing her leg without consent and offered payment in exchange for an erotic massage. 

It then emerged that Musk had supposedly paid the woman US$250,000 ($388,000) in 2018 to settle the sexual misconduct claim. 

Musk's personal net worth plummeted by US$10b ($15b) in a single day after the allegations came to light, and Tesla similarly suffered. 

Musk has also captured the world's attention since April after inking in a US$44b ($68b) deal to purchase social media giant Twitter. 

The billionaire has apparently lost US$45b ($69b) from his personal fortune since announcing the deal. 

Elon Musk, chief executive officer of Tesla Inc. Photo / AP 

And he's set to lose another billion dollars if he pulls out of the deal, which experts think he is gearing up to do. 

Earlier this month Musk warned he was putting a temporary halt on his much-anticipated deal to buy Twitter, sending shares in the social media giant plunging. 

"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 per cent of users," he wrote on Twitter. 

Analysts have speculated the move could be a way for Musk to renegotiate the price or scrap the deal altogether. 

If Musk ends the deal, he is on the nose for a US$1b ($1.5b) penalty to Twitter. 

- by Alex Turner-Cohen, news.com.au