The worst performance in the S&P 500: This is behind Tesla’s price collapse

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Elon Musk (52) has a penchant for superlatives: When space company SpaceX tried to launch another rocket on Thursday and failed again, Musk praised the “Starship” as the “greatest flying object of all time.” Another edge from his corporate empire is likely to come back a bit to his dismay: Tesla, Musk’s electric car maker, is the worst-performing stock in the entire S&P 500. The US stock index includes the 500 largest listed US companies – which is looking for a negative record. So what do you mean?

Since the beginning of the year, Tesla shares have lost nearly a third of their value. Things fell even harder this week, with the price falling to its lowest value in almost a year.

The reason for the price collapse is, among other things, safety shortcomings: at the beginning of the year, Tesla had to recall millions of cars due to problems with the autopilot. Investors doubt whether Tesla can continue its growth.

Analysts expect another -20 percent

The recent decline in the stock market is linked to the pessimistic analysis of many banks. According to CNN’s report, US bank Wells Fargo writes in its analysis that it is “a company that grows without growing.” The analyst predicts that competitive pressure will increase for Tesla and the numbers will weaken further next year.

UBS also noticeably lowered its price expectations for Tesla this week: Analysts now set the price target at $165, down from $225 at the beginning of the year.

The Wells Fargo analyst expects prices to collapse further: Even after the recent decline, he thinks Tesla shares are overvalued compared to Tesla’s weak profit numbers. Wells Fargo still puts its target size at $125. This would amount to another price drop of more than 20 percent and would no longer be far from Tesla shares’ historic low.

What about Elon Musk? No comments yet on this week’s latest price crash. But it can hardly be assumed that the loudmouth remained silent due to the shock of the share price collapse. He’s more likely to refrain from tweeting about Tesla’s share price for fear of U.S. stock market regulators. He had already been in court once for market manipulation in connection with controversial Tesla tweets.

Source :Blick