Tesla stock tanked Thursday after the company’s highly anticipated investor conference largely fell short of Wall Street’s hopes for concrete information on a cheaper electric vehicle model that could be a boon for future sales.
Shares of the electric vehicle titan slipped 7% to $189 in early Thursday trading, its largest daily decline of 2023.
The $44 billion loss in market capitalization trailed a 3-and-a-half—hour presentation to investors from Tesla’s billionaire CEO Elon Musk that was scant on any details on Tesla’s new Mexican production facility or on a long speculated about less expensive model, with Musk instead focusing on his grandiose vision for a solar and battery-powered global future.
What Tesla presented Wednesday was “long-term focused, somewhat disjointed and fairly technical,” Bernstein analyst Toni Sacconaghi wrote in a Thursday note to clients, maintaining his $150 price target for Tesla, indicating 21% downside.
“Most important” was the omission of any information on a cheaper Tesla vehicle, according to Sacconaghi, predicting the company won’t be able to produce a less expensive car at scale before 2025, and will need to cut prices on its existing models in the interim to meet growth targets (and thus drag down future profit).
Wedbush analyst Dan Ives left Tesla’s investor event far more bullish, writing Thursday the investor event made it “crystal clear just how far ahead Tesla is ahead of the rest of the auto industry when it comes to producing and scaling EVs.” Ives added “the stage is set” now for Tesla to move forward on a model costing less than $30,000, predicting the cheaper car will be announced this year and hit the road in late 2024.
Shares of Tesla remain up 75% year-to-date after Thursday’s selloff. That’s the biggest jump of 2023 of any stock listed on the S&P 500. But Tesla stock is down more than 50% from its November 2021 peak after shares tanked 65% in 2022 amid a poor macroeconomic environment, dragged down by the largely unpopular behavior of Musk, who offloaded a considerable portion of his Tesla shares to fund his politically fueled $44 billion acquisition of Twitter.
Tesla stock dropped an average of 6% in the week following its seven investor events and announcements between 2019 and 2022, according to Bernstein.
$11 billion. That’s how much Musk’s fortune tumbled Thursday. He remains the world’s second-wealthiest man with a $184 billion net worth, $26 billion shy of LVMH chairman Bernard Arnault’s fortune.
Tesla’s Investor Day Is Long On Time, Short On Useful New Details (Forbes)
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