Why is TSLA stock down? Tesla has dropped more than 10% since Trump took office
www.fastcompany.com
Teslas stock (Nasdaq:TSLA) moved lower once again Monday, falling almost 5% in midday trading, the continuation of a fairly steady decline since Donald Trump took office.Shares of the automaker (trading at around $384 per share in midday trading) are down more than $43 a share since their close on January 17, a dip of more than 10%. That comes as CEO Elon Musk has been spending a large percentage of his time running the Department of Government Efficiency in Washington, D.C., and not focusing as heavily on Tesla.The steady drop in Teslas stock is likely due to a variety of factors. Mondays decline follows news that Tesla has lost market share in Sweden and Norway, despite a large increase in overall car demand.In January, Tesla sold 405 new vehicles in Sweden, a 44% drop from the year prior. Norway was down 38% with 689 vehicle sales.Also, the looming enforcement of tariffs on China and Canada (Mexico has been given a one-month delay) are scaring investors. Musk recently conceded on an earnings call with analysts that while Tesla has tried to localize its supply chain, its still very reliant on parts from across the world for all our businesses. Therefore, the imposition of tariffs, which is very likely, will have an impact on our business and profitability.Canada is a key supplier of automotive parts, as is China. And Canadian officials are specifically focusing some of their ire with Trumps tariffs on Musk. Premier Doug Ford announced Monday that Ontario would scrap a $100 million contact with Starlink, which is part of Musks SpaceX. (Musk met that news Monday afternoon with the tweet, Oh well.)Earnings missThe concern surrounding overseas sales and tariffs comes on the heels of the companys disappointing fourth-quarter earnings last Wednesday. The company reported earnings of 73 cents per share, compared to analyst expectations of 76 cents and revenues of $25.71 billion versus an anticipated $27.26 billion. Revenues were down 8% compared to the same quarter the year prior.Last year marked the first time Tesla deliveries came in lower than the year before. All told, the automaker delivered 1.8 million vehicles to customers in 2024. (Tesla does not report precise sales figures, so deliveries are the best barometer of that figure.)Tesla did not reply to Fast Companys request for comment about the stock drop. The company did see a big surge in stock price following Trumps election last November, but has surrendered most of those gains. Tesla closed at just over $342 per share on November 20. It peaked just under $480, but now stands around $384.Tesla stock also has a staggeringly high price-to-earnings ratio. On Monday, it stood at 188.95, compared to Apple and Microsoft, which are in the low- to mid-30s, and the average, generally ranging from 20 to 25. (Higher P/E ratios indicate a company could be overvalued.)Shareholder questionsIn fact, Musk himself could be causing some of the investor agita, however. His focus on DOGE and government issues has not escaped the companys shareholders.Prior to the Q4 earnings call, investor-submitted questions on the companys digital forum involved a slew of concerns about the amount of time Musk is spending at the White House, along with some of his recent actions, including a gesture that has been likened to a Nazi salute. A sampling of those reads:How much time does Elon Musk intend to spend at the White House and on government activities vs time and effort dedicated to Tesla?How much time does Elon Musk devote to growing Tesla, solving product issues, and driving shareholder value vs. his public engagements with Trump, DOGE, and political activities? Do you believe hes providing Tesla the focus it needs?Does the board plan to review the negative image that Elon Musk is having on the Tesla brand and the conflicts between his politics and the Mission Statement?We cant pretend that Elons erratic actions arent negatively effecting [sic] the stock price and brands reputation. What is your plan to curtail the CEOs behavior, and/or replace his position to secure a more likely longevity as a brand?All of those questions went unanswered.
0 Yorumlar ·0 hisse senetleri ·60 Views