Tesla (NASDAQ: TSLA) is free falling, while short sellers are big and cashed. Stocks have been cut by half in the last three months, with hedge funds giving out $16 billion of a market capitalization, with a base of over $700 billion. Elon Musk’s net worth? More than $100 billion down. Investors are surprised not only by the foundations of Tesla’s weakening, but also by the growing entanglement in mask politics. His general support for far-right parties in Europe and aggressive government spending cuts in the US have sparked consumer backlash and have hit Tesla’s brand violently.
The anger wasn’t just Wall Street spilled down the street. Protesters flock to Tesla dealers across the United States, and are angry at Musk’s influence in the Trump administration and what they consider to be his unidentified power. Some demonstrations remained peaceful, while others escalated to vandalism. The movement has not slowed despite the threat that government officials have warned of crackdowns. Meanwhile, Tesla’s global sales earn 72% in Australia and 76% in Germany each year with fire fuel.
With stocks freefalling, analysts rush to reassess Tesla’s future. JPMorgan cut its price target to $120, calling the brand’s decline “unprecedented.” The hedge fund is split. Meanwhile, others are running for the exit. One thing is clear. Tesla is no longer the untouchable EV juggernaut that it once was. Is investors currently left to decide that the stock has another gathering, or is this a long, painful start to the calculation?
This article was first published in Gurufocus.
