U.S. electric vehicle maker Tesla’s stock price fell below $500 billion on the 14th (local time) for the first time since November 2020. Recently, the news that Tesla CEO Elon Musk is considering taking out loans with Tesla shares as collateral to reduce high-interest debt received from the acquisition of Twitter has been a negative factor as Goldman Sachs lowered its price target sharply.
According to Bloomberg News, Tesla shares fell 2.6% to $156.80 on the U.S. stock market. This lowered Tesla’s market capitalization to $495 billion, and this year’s decline rose to 55%. Tesla is the sixth largest company among Standard & Poor’s (S&P) affiliated companies based on the closing price of the day. The S&P index closed 0.6% lower on the same day. Tesla, which will be included in the index just two years next week, has dragged down the S&P index three times this year.
Tesla was as low as other stocks due to signs of a recession, the Federal Reserve’s interest rate hike, and dumping of technology stocks. On top of that, the company’s own concerns, such as supply shortages, soaring raw material prices, and production disruptions, as well as criticism that Musk is focusing only on Twitter management, which he newly acquired, put a heavy burden on stock prices.
On the 8th, CEO Musk reported that he is discussing replacing some of his debts with a “margin loan” using Tesla shares as collateral to reduce $13 billion in debt that Bloomberg took over Twitter. However, the biggest impact on the stock price was that investment banks lowered their target stock prices.
Morgan Stanley lowered its U.S. stock price forecast, warning that “the demand for electric vehicles has been blocked.” Goldman Sachs lowered Tesla’s price target to $235 from $305.
Goldman Sachs analyst Mark Delaney also lowered Tesla’s earnings per share to $4.50 next year from the previous $4.90 and $5.6 in 2024. However, Wall Street investment banks still see Tesla’s long-term outlook positive and maintain their buying opinions.
Analysts Delaney said Musk’s rising presence on Twitter and his continued use of political themes have resulted in Tesla’s brand being “more polarized.” He pointed out that Tesla’s brand has significant value in clean energy and high-tech fields, and Musk’s move gives a different brand image.
