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Bargain hunters grabbed after the high price losses of the past few days. The shares ultimately gained 3.31 percent in New York trading at $112.71 after having lost a good 44 percent in value up to the previous day in December alone and had closed the last seven trading days in a row with a minus sign.
However, it remains to be seen whether the shares in the electric car manufacturer are really a bargain at current prices, after all Tesla is still valued higher on the stock exchange than the three German car manufacturers BMW, Mercedes-Benz and Volkswagen together.
The day before, Tesla shares had fallen even further to their lowest level since August 2020 at $108.76. The announcement that production at the important Chinese site in Shanghai would be temporarily stopped in January had a negative impact. This raises questions, because production would then be idle longer than is necessary for the celebrations of the Chinese New Year, wrote analyst Matthias Volkert from DZ Bank in a recent study. Tesla is struggling with an uncertain sales trend in the Chinese market. The analyst lowered the fair value for the stock to $190 from $295 but still recommends buying it.
With a view to the recent slide in the papers, capital market strategist Jürgen Molnar from the broker Robomarkets wrote that short sellers, i.e. those investors who rely on falling prices, had finally made money with Tesla. For years they have been fans of the company boss Elon Musk been led through the arena on a leash, but now, with the price crash of the past few days, the coffers were filling up, at least for them at the end of the year. Now the question is when the long-term optimists will come out of their cover again.
Since the beginning of the year, the price decline has totaled a good 68 percent, making Tesla one of the biggest losers in the NASDAQ 100 in 2022. The technology-heavy selection index fell by a good third over the same period. If Tesla shares turn around this Wednesday and close again in the red, it would be the eighth day in a row with discounts and thus the longest loss in the twelve-year stock market history of the US electric vehicle pioneer.
Responsible for the drastic slide in the price of Tesla shares is not only the monetary policy tightening course of the US Federal Reserve with its negative effects, especially on interest-sensitive technology stocks and concerns about an apparently weakening demand, but also company boss Elon Musk. To finance the 44 billion dollar takeover of the short message service Twitter, which was finally completed at the end of October, the Tesla boss and major shareholder alone recently sold Tesla shares for almost 40 billion dollars.
Many investors blame Musk for making headlines, especially with controversial changes on Twitter, and for having neglected Tesla. Even Musk’s announcement before Christmas that he would probably not sell any more Tesla shares for the next two years and that he would relinquish control of Twitter as soon as he had found a suitable successor did little to appease investors.
According to the analyst Ipek Ozkardeskaya from the online bank Swissquote, Tesla has apparently lost confidence in the capital market for the time being and the impressive run with an almost fifteen-fold increase in the share price in the past two years has come to an abrupt end. Investors are now curious to see how the looming recession and competition from other manufacturers will affect demand and when Elon Musk will finally focus on Tesla’s fortunes again.
The company’s market capitalization has now shrunk to around $353 billion from a record high of more than $1.2 trillion in November 2021. This means that the company is still significantly more expensive than the three major German car manufacturers Volkswagen, Mercedes-Benz and BMW, which together weigh about 200 billion dollars. But the gap has shrunk noticeably, even if the competition – especially those from Wolfsburg – also had to lose feathers over the course of the year.
NEW YORK (dpa-AFX)
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