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If you’re in favor of a flamboyant company that has a flamboyant CEO and an extravagant stock price, I can tell you exactly where to go: Tesla, Inc.
The silly CEO, of course, is Elon Musk, who was also crowned Tesla’s King of Technology (TSLA) 3 years ago, that name means.
Tesla itself is a flamboyant automaker that has also engaged in a variety of non-car businesses, such as promoting solar power in homes after it shelled out $2. 5 billion in inventory in 2016 to buy SolarCity, a company founded by two of Musk’s cousins.
And as far as its stock price goes, Tesla is Screwball Central. If you buy their shares, all you know is that you’re in for a crazy ride. However, you can’t wait in which direction. Depending on the year we look at, Tesla is either one of the biggest winners or one of the biggest losers in the market.
So if you’re new to Tesla or just need to buy more stock, here are some numbers to consider.
Last year, Tesla was among the U. S. companies that gained the most in market value, according to figures accumulated through Wilshire indexes at my request. Tesla’s 2023 profit of $366 billion in market value is the seventh-largest among U. S. companies.
That’s how Tesla is a member of the Magnificent Seven, a term coined by Bank of America analyst Michael Hartnett. The Seven, which also include Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Nvidia (NVDA), Alphabet (GOOG, GOOGL) and Meta (META), accounted for more than 60% of the S’s performance
But in less than four weeks this year, Tesla has given back more than half its 2023 gain. Its stock performance has switched from magnificent to maleficent.
This is mainly due to the nasty monetary figures announced by Tesla in January, combined with a larger electric car festival in major markets such as the United States and China. Not to mention some games played by Musk, which we’ll talk about in a moment.
As of Jan. 25, Tesla was by far the biggest dollar loser so far this year, with the market price down $207. 4 billion, according to Wilshire. That’s more than six times the drop recorded by the second-losing giant, Boeing, whose price fell by $33. 3 billion, thanks in large part to the door panel that blew up one of its planes on a flight earlier this month.
It’s also 7. 5 times the $27. 6 billion drop of third-biggest loser Intel, and just about 10 times the $21. 6 billion drop of fourth-biggest loser, UnitedHealth Group. The ups and downs of Tesla’s stock market price are dizzying.
I use market price figures instead of percentage update figures because market prices show how much shareholders (and investors in the index budget that comes with Tesla stock) have gained or lost over a period of time.
I discussed Tesla’s huge 2022 loss numbers with you last January. But Tesla’s huge market gain last year and its huge loss so far this year make it time for us to revisit the issue.
To understand what’s going on with Tesla’s stock price, we need to combine Tesla’s demanding operating and competitive conditions and successes with games played by Musk, who, among other things, has threatened to move some of Tesla’s synthetic intelligence operations elsewhere. his business empire unless Tesla’s board of directors provides him with billions of dollars in more Tesla inventory.
As you probably know, Musk sold tens of billions of dollars in Tesla inventory last year to boost the budget he needed to buy a majority stake in X, then Twitter, and pay the source of the income tax owed on the profits. of the company. (It will be interesting to see what impact, if any, Tuesday’s ruling via a Delaware ruling on the cancellation of Musk’s 2018 inventory option package will have on his current relationship with Tesla. ) directors. )
Twitter has been a monetary fiasco for Musk and his co-investors. Fidelity Investments, for example, has reduced X’s stake in part of their mutual budget by 68%, according to the latest available report.
Alas!
None of this, adding up the X-shenanigans, can affect Tesla’s stock price.
Over the long term, for sure, Tesla has been a big winner for investors. Even with its sharp recent decline, it’s still worth 7.5 times as much as it was at the end of 2019.
It’s been, however, a big loser in recent years. It’s worth a bit less now than it was at year-end 2020. But the big slide has taken place since the end of 2021. From then through Jan. 25, Tesla’s stock market value was down more than half a trillion dollars, or 47%. During that same period, the S&P 500 index, which had plenty of ups and downs of its own, rose by about 3%.
It’s conceivable that Tesla will recover like it did last year and its price will start to skyrocket again. But buying Tesla inventory and hoping for a sleek ride is like putting a Tesla in fully self-driving and hoping for the best.
Sure, you may end up with a great ride. But you can also end up in a ditch.
Allan Sloan, who has written about business for more than 50 years, is a seven-time recipient of the Gerald Loeb Award, the honor given to business journalism. He won the Loebs in four other categories over another four decades.
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