Elon's Crashing Empire
February 17, 2023
Tesla has become a household name in the US now. After the debut of its line of mass-produced electric vehicles, it grew to a height of fame at record pace, propelling Elon Musk’s net worth to a staggering $320 billion in late 2021. This was due to the rapidly growing popularity and status the Tesla name had to offer. From the genesis of the worldwide pandemic, the company's stock began to soar in value and ended 2020 with an 8x increase in price. Many factors such as its inclusion in the S&P 500 index and people diverting their attention towards high-growth stocks due to the recession, and improvements in batteries all contributed to this skyrocket in value. As of the end of 2022 however, Elon’s fortune was sliced cleanly in half and stock prices came plummeting down as if an avalanche had been instigated, leaving a 65% decline in its wake.
One of the very reasons Tesla was doing so well in 2020 was due to the perceived “laser focus” which Musk had directed towards keeping the company in good shape and governing it in the right path. His effort and attention was well perceived by the public and gained trust for his leadership; however, with Musk’s on and off negotiations for Twitter ultimately being brought to reality, shareholders have become uneasy with the diminishing returns gained from Twitter and the time Elon puts towards it, taken away from Tesla. Radical shifts and adjustments were made in Twitter’s company structure leaving the company with an unrepaired leak, pouring out money with no end in sight.
A fear of demand and production has also been plaguing the mind of investors leading to a massive 11% one-day decline in December of 2022, regarding the production plant in Shanghai. This halt in supply occurred amid a new wave of infections spreading through China which affected many factory workers. In addition, Tesla’s discount offerings to buy its two highest-volume models preceding the new year exacerbated the trepidation already present within investors regarding the desperation for demand in the company.
Elon has been treading carefully in recent weeks and has been starting the year very strong with an 82.14% increase so far in stock value putting it at $196.89, but still astronomically far from its once gargantuan high of $409.97 per share in November of 2021. The future remains murky and mysterious for Tesla, but if Elon can resist his erratic temptations and return to focusing on the company, there may be brighter days ahead for Tesla.