Grab the popcorn, Tesla’s share price is tanking again

March 9, 2021March 14, 2021 Iain Curry 2208 Views elon musk, Tesla share prices, Tesla stock, Tesla value

If you’ve not got your life savings invested in Tesla stock, watching its volatile fluctuations over the past few months – and how it affects Elon Musk’s personal wealth – is pure entertainment.

Perhaps only Bitcoin’s rollercoaster value ride can rival the American EV company’s crazy peaks and troughs, but while the cryptocurrency has boomed 55 percent in 2021, Tesla’s share price has tanked in recent few weeks.

Its price in the last month to time of writing (February 9 – March 9) has fallen from US$853 per share to just US$563 – down 34 percent.

That’s close to a US$300 billion drop in value, while Elon’s personal wealth has fallen by some US$70 billion in that time. Jeff Bezos has no doubt broken out the Budweisers.

Tesla’s market cap reached US$834 billion (over $1 trillion in Aussie money) in January 2021, making it by far the world’s most valuable car company. Not only was it over four times as valuable as that of second-place Toyota, it was also, briefly, worth more than Facebook.

After a share price fall of nearly 6 percent today alone, Tesla’s market cap is now ‘just’ US$540 billion.

Tesla CEO Elon Musk – personal wealth has dropped by some US$70 billion in a month

But unless you bought Tesla stock at its peak of US$900 in January this year (US$883 was the highest stock closing price on January 26), most investors have done very, very well out of the company.

Its 52-week low was US$70 per share in March 2020, so smart investors – if they timed it right – could have seen a 700 percent return on their investment.

So why the plunge? Well, take your pick. Financial advisers have come up with myriad reasons, but certainly one that makes unequivocal sense is Tesla now facing ever-increasing competition in the electric vehicle space.

Ford Mustang Mach-E GT Performance Edition — Strong Ford Mustang Mach-E sales have helped cut Tesla’s EV market share

Not just from prestige brands, either. Morgan Stanley figures showed Tesla’s EV market share in the US was at 69 percent in February, which is down from 81% on the same month in 2020. Chief disruptor was Ford’s electric Mustang Mach-E SUV. Nearly 4000 Mach-Es were sold in the States in February.

Scour the financial pages and it’s comical how analysts are in disagreement where the Tesla share price will end up next. It could have a long way to fall, or, say some, reach over US$1200 per share in the next 12 months.

Seems you’d be as well just slinging your dollars on black or red.

Iain Curry

A motoring writer and photographer for two decades, Iain started in print magazines in London as editor of Performance BMW and features writer for BMW Car, GT Porsche and 4Drive magazines. His love of motor sport and high performance petrol cars was rudely interrupted in 2011 when he was one of the first journalists to drive BMW's 1 Series ActiveE EV, and has been testing hybrids, PHEVs and EVs for Australian newspapers ever since. Based near Noosa in Queensland, his weekly newspaper articles cover new vehicle reviews and consumer advice, while his photography is regularly seen on the pages of glossy magazines.