Stock down 18% over past five days on doubts about Musk’s share sales and EV consumer demand 

 Tesla stock has registered its worst week since the onset of the pandemic in March 2020, losing $85bn in market value in a reflection of investors’ doubts about the electric carmaker’s prospects as chief executive Elon Musk runs Twitter at the same time.

Shares in Tesla closed at their lowest point in more than two years on Friday, taking its market capitalisation below $400bn. The stock has lost 18 per cent this week.

Tesla was worth $1.2tn at the beginning of the year. The drop of more than $800bn in value is equal to the combined current market capitalisation of more than 80 of the smallest companies in the S&P 500 index, according to S&P Global Market Intelligence. The carmaker’s market cap this week slipped below that of ExxonMobil, a company reliant on fuelling internal combustion cars.

Downward pressure on Tesla’s stock has intensified in recent months because of Musk’s own heavy selling to fund his $44bn takeover of Twitter as well as mounting concerns about the outlook for sales of its cars.

Tesla’s share price dropped 9 per cent on Thursday after the company said it would offer price discounts of $7,500 to US consumers on two of its best-selling models, an announcement that sparked worries over consumer demand.
Later that day, Musk promised via Twitter he would not sell any more of his Tesla stake for at least a year. He also said he was open to the idea of buybacks.

“I won’t sell stock until, I don’t know, probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter,” he said

Musk, who recently lost the position of world’s richest man, has sold almost $23bn of stock since announcing his $44bn acquisition of Twitter. Despite a promise in April to stop doing so, he subsequently sold shares on three occasions, most recently last week. The disposals have angered big investors who feel the entrepreneur has abandoned the carmaker to focus on his new purchase.

Musk has promised to step down as chief executive of the social media platform once he finds a replacement following a poll of Twitter users on Sunday on the issue.

We'd Use Securities tech analyst Dan Ives, on Friday lowered his price target from $250 to $175 for the shares but maintained an “outperform” rating. Tesla’s stock closed 1.8 per cent lower at $123.15 on Friday.