Tesla stock slides on Model 3 and Model Y price cuts

Yahoo Finance's Rachelle Akuffo and Brad Smith introduce this week's "What Just Happened" topic on Tesla stock and break down how shares of the EV maker are trading today and throughout 2022.

Video Transcript

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RACHELLE AKUFO: More than a car, more than a business, more than one man. Since its public listing almost 12 years ago, Tesla has built one of the most recognizable brands on the planet. Few companies owe as much to one individual, even fewer are as entirely at their mercy.

When shares topped out at just shy of $410 in November of 2021, he was still riding the crest of the wave. Now the mission is entirely different for Elon Musk, stop the bleeding. Going from the Ironman inspiring techno-king to Chief twit and a social media agitator to rival the best of them.

Leveraging the electric vehicle maker's astronomical valuation to send the rest of us into orbit with SpaceX. And maybe even reading our minds. Tesla was at the heart of it all.

For some, the original meme stock pumped up by investor fervor, Musk aficionados and Green Climate advocates the world over. Now it's the target of short sellers, activist investors, and angry owners worried they aren't getting a fair shake.

Another key investor was also dumping the stock, Musk himself. The only person to ever lose $200 billion in a year. Tesla and its leader now facing a firefight, a distracted chief executive, a tricky relationship with regulators, the allure of celebrity status. Add to that an aging fleet of cars, a host of competitors, and the lion's share of profits coming from the most uncertain of economies.

Are investors in Tesla just spinning their wheels? Was the strategy only good when the stock went to the moon? Is the party over? We look at the future for one of the world's most groundbreaking companies.

Welcome to "What Just Happened," Yahoo Finance's deep dive into the story dominating the news agenda. Why it matters for your investments? And how it could unfold in the coming days, weeks, and months?

I'm Rachelle Akufo, alongside Brad Smith. And this week we're talking all things Tesla. That will cover everything from the stock slump, Musk, the man himself, and what happens to the myriad of businesses tied to the world's top EV maker. So Brad, first let's start with those shares.

BRAD SMITH: Yeah, absolutely here. And taking a look at Tesla shares as we've continued to be tracking them and we'll pull up a look on your screen too, right now, on the day, we're down by about 2.9%.

But if we think even more broad terms here, we've got to remember, the slippage, or the skidding if you will, pun fully intended there, that's taken place over the course of 2022 and what that sets up into 2023.

Now a few factors played into that slippage over the course of 2022. And perhaps none more notable than the fact that you had Tesla CEO and founder, Elon Musk, selling off as many shares as he did to finance his deal with Twitter.

That combined with some of the production issues that we had seen and a global focus that really cast some cold water perhaps on the demand, even within one of its most noted regions that they wanted to grow out their business even more, in China, as some of that sentiment among shoppers there shifted to more of the homegrown brands.

So we'll see exactly what that looks like as we move on throughout 2023 and where that demand starts to reemerge. But taking a look at the stock chart over the past two years, net-net, we are lower by about 57% over that two year in aggregate.

And here's some of the interesting moments to keep tabs on. Because one of the double tops that we have seen formulate within Tesla and actually, we would have to go back even further.

But within the spikes that we have seen over that course in period of time it's important to remember that this is a stock, this is a ticker symbol that has been through stock splits, that has been through a major selling off of shares, as I was pointing to earlier.

And then additionally, trying to make sure that even on the regulatory front, all things that we're going to break down, that they continue to remain in good favor in all of the landscapes and regions that they operate in, Rachelle.

RACHELLE AKUFO: I mean, Tesla's story really is fascinating. So let's get into more of this, Brad. We know that Tesla shares have been on a wild ride, especially, as you mentioned there, over 2022.

You have to wonder, what's the biggest issue here? Is it having a distracted CEO? Is it having so many legacy players now in this space really vying for the attention of other EV consumers who perhaps want a cheaper alternative? Or perhaps don't like what they're seeing tweeted out by Elon Musk.

And then of course, you have the fallout that continues from his tweets. Even stemming back from that settlement with the SEC but still getting himself into hot water in the middle of a trial that's supposed to start next week.

Because you know, he doesn't like to be reined in, our Elon Musk. Those who love him say he's a genius. But even some of his most fervent investors are getting very frustrated right now.

BRAD SMITH: And we can't go without giving a nod to the broader environment that we find ourselves in that the equity markets certainly have been reactive to and especially within tech, which is the absence of easy-money policies.

When you have a Fed that is tightening and was tightening as aggressively as they were within 2020 to combat inflation, that certainly has an outsized impact on tech, which really looks through exactly where some of that money and the money supply can help them with their own investments.

And I think for Tesla, that's something that investors also had to take note of alongside some of the other FAANG MANTA names, if you will. A term that came about, or an acronym that came about early on in 2022. As we continue to discuss and see exactly where that revision of some of the high growth internet names had really started to point to.

And Tesla was one of those names that was thrown into that FAANG MANTA conversation. So perhaps we need a new, splashy acronym to really point towards in 2023 when we think about that as well, Rachelle.

RACHELLE AKUFO: I believe everyone came up with MATANA, that covered the whole range of what he saw in some of these emerging stocks. But even with this frustration with Musk, we are still seeing a lot of people, perhaps, not bullish on Musk himself, but still bullish on Tesla at least.

We saw that on Wednesday, a tweet from Tesla's third largest individual in shareholder, Leo Koguan. He added about 50,000 more shares. He said, so he bought about 600,000 more shares in one week. An additional 2 million shares are being assigned this month.

Now this is someone, he really does love Musk. He's a self-proclaimed Musk fanboy. Getting a bit frustrated but still sticking with the company, still being bullish despite some of the frustrations here.