Tesla’s shares plunged 12% on Tuesday, stripping nearly $50 billion of the company’s value and putting CEO Elon Musk under scrutiny for appearing to be focused on Twitter.
The losses exacerbated a months-long crash. Since Musk took over Twitter in late October, Tesla stock has fallen by half. Since Musk began investing in Twitter last January, the company has lost nearly three-quarters of its value.
In early trading Wednesday, Tesla shares are up about 3%, recouping some of the losses.
This week’s steep drop followed a disappointing sales report for the final three months of 2022 that fell short of Wall Street expectations. Tesla delivered 405,000 vehicles from October to December; Analysts expected 420,000 deliveries.
Overall, Tesla sold a total of 1.3 million cars last year, up 40% year over year. The number fell short of Tesla’s stated goal of 50% annual sales growth.
The latest blow deepened some concerns already hanging over the automaker. Tesla is facing falling demand amid recession fears and interest rate hikes, increased competition and pandemic-related production issues.
Additionally, some analysts and major investors have slammed Musk for a perceived lack of focus on Tesla, saying the company needs leadership as it grapples with an unfavorable business environment.
“We all know that Tesla management needs to be 100% focused right now,” said Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management. tweeted on Tuesday.
Gary Black, managing director of investment firm Future Fund, said on Monday in response to the company’s latest sales report: “No way to sugarcoat this.”
Tesla and Elon Musk did not immediately respond to ABC News’ request for comment.
Musk previously attributed the falling stock price to rising interest rates, which typically benefit savers who benefit from a surge in bank account interest income.
“As guaranteed interest rates on bank savings accounts start converging with non-guaranteed returns in stock markets, people will increasingly shift their money from stocks to cash, causing stocks to fall,” Musk said said last month in response to concerns from a prominent Tesla investor.
Musk said late last month that he would step down as Twitter CEO if the company identified a successor.
The world’s richest person has sold nearly $40 billion worth of Tesla stock since late last year, including a $3.6 billion sale just last week.
The sales have reduced Musk’s ownership of Tesla, raising questions about his continued involvement with the company.
Chinese-made Tesla Model 3 vehicles are seen in this January 7, 2020 file photo during a delivery event at its plant in Shanghai, China.
Aly Song/Portal, FILE
Since taking over Twitter, Musk has made dramatic changes. He fired top executives and halved the company’s 7,500 employees while reinstating some formerly suspended accounts.
For his part, Musk has defended his actions on Twitter as part of an aggressive effort to save the company from financial peril, which he described as an “emergency fire drill” in a December Twitter Spaces interview.
“That is the reason for my actions,” he added. “They can sometimes seem wrong or strange or whatever.”
In an interview last month, Musk vowed to stop selling Tesla stock until at least 2024, despite previously violating promises to stop selling the shares. He insisted he hadn’t “missed a single important Tesla meeting” since taking over Twitter.
Tesla remains the top seller of electric vehicles in the US, but its lead has narrowed in recent months as competitors offer a variety of affordable alternatives, a report by S&P Global Mobility showed in November.
The company held a 65% market share of newly registered electric vehicles in the U.S. through the third quarter of 2022, down from 71% in 2021 and 79% in 2020, according to the report.
In response to weaker demand, Tesla announced in December that it would be offering $7,500 in rebates on Model 3 and Model Y vehicles shipped in the US that month.
In a tweet Tuesday, Musk appeared to acknowledge how his fortunes had changed: “12 months ago I was Person of the Year,” he said said.