Tesla lost $199 billion in value during its biggest back-to-back selloff since September 2020, following a string of bad headlines and tweets that pushed the stock to drop.
The stock closed down 11.99% on Tuesday, Nov. 9, on pace to be the largest of the year for the stock and comes after a fall of nearly 5% on Monday, tempering a mostly upward trend for the year, CNBC reports. Overall, Tesla shares are however up more than 47% in 2021, according to CNBC.
What accelerated the stock’s steep and abrupt decline was CEO Elon Musk’s Twitter poll, asking his 63 million Twitter followers whether he should sell 10% of his Tesla stock.
“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?” Musk tweeted.
And they did.
“I was prepared to accept either outcome,” Musk tweeted on Sunday, Nov. 7. This sent the stock tumbling.
Then there were speculations that there might be a fairly simple reason behind Musk’s Twitter, as the planet’s richest man has a looming tax bill of more than $15 billion, which some experts described as “a ticking tax time bomb,” as GOBankingRates previously reported.
Peter Cohan, a lecturer at Babson College and author of “Goliath Strikes Back,” told GOBankingRates that while the 10% plunge in Tesla’s stock is definitely painful for those who have a very short-term way of looking at their investments if you “step back from the action in the last few days since Musk announced a poll to decide whether to sell 10% of his stock, you realize that Tesla has always been a highly volatile stock.”
“When the stock falls, it is a buying opportunity for those with a longer-term investment horizon. While clearly a person with some significant quirks, Musk is a once-in-a-generation entrepreneur who has created the future of EVs and space. The drop in its stock is a chance to get in on the benefits to shareholders of backing Musk,” he added.
Adding to the stock’s travails, Michael Burry of The Big Short fame, said in a now-deleted tweet captured by Business Insider:
“Regarding what @elonmusk NEEDS to sell because of the proposed unrealized gains tax, or to #solveworldhunger, or … well, there is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th.”
Troubles started earlier this month when Musk said that “no contract has been signed yet” with Hertz, sending the stock down that morning. The prior week, Hertz had announced that it had acquired 100,000 Teslas in what represented the largest electric vehicle fleet in North America and one of the largest in the world, which sent the EV stock soaring, bringing the company to hit a $1 trillion market cap. In turn, Musk tweeted that it was “strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem.”
There was also the beef he took last month with Oregon Senator and chair of the Senate Finance Committee Ron Wyden’s plan for the Billionaires Income Tax.
“US national debt is ~$28,900 billion or ~$229k per taxpayer. Even taxing all “billionaires” at 100% would only make a small dent in that number, so obviously the rest must come from the general public. This is basic math. Spending is the real problem. https://usdebtclock.org,” he said in a tweet at the time.
See: Experts Say SpaceX Might Make Musk a Trillionaire, But Tesla Just Boosted His Worth $25 BillionFind: Hertz Purchases Fleet of 100,000 Teslas — Tesla Becomes First Auto Company To Reach $1 Trillion Market Cap
And then let’s not forget that earlier this month, Musk said he would sell $6 billion worth of Tesla stock to solve world hunger — if the United Nations World Food Program can explain how it would spend the money.
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