In 2022, CEO Elon Musk earned the title of becoming the first person to ever lose $200 billion. The paper loss is due to the drop in Tesla’s (TSLA) share price.
TSLA stock lost 65% of its value in 2022. Musk’s buyout of Twitter, falling stock markets, inflation, and weakening EV demand are the reasons.
Twitter is a definitively negative headwind for Tesla. Musk loaded the company with debt, accelerating the monthly cash burn rates. Despite cutting costs, Musk will need to replace the lost advertising revenue.
Ad spending is falling. Corporations claim that they are concerned about Twitter’s stability. However, the recession does not justify lavish ad budgets.
Inflation is hurting disposable income. Tesla EV sales will likely decline. However, competitors will face a tougher time and higher relative costs.
Competitors like Ford (F), GM (GM), Lucid (LCID), Polestar (PSNY), and Rivian (RIVN) are late to the EV market. While Ford and GM have high costs in the gas-powered automotive sector, Rivian and Lucid sell few units.
Tesla will expand its EV market share in 2023. Its stock price may remain under selling pressure. The short float is only 2.76%. This could climb as bears bet against Tesla’s valuation.