Tesla's shares drop below $150, wipes out yearly gains

Tesla's stock tumbled below $150 per share, giving up all of the gains made over the past year as the electric vehicle maker reels from falling sales and steep discounts intended to lure more buyers.

Shares in the Elon Musk-owned company slid nearly 4% in intraday trading Thursday, in what now stands as the third worst week for the stock in 2024, a year that has been dismal for Tesla investors. The Austin, Texas company's shares are down 12.4% this week and more than 39% this year.

Shares of Tesla Inc last traded at the $150 level in January 2023.

It's also been a bad year for employees. Tesla said Monday that it was cutting 10% of its staff globally, about 14,000 jobs. The next day, Tesla announced it would try to re-instate Musk's $56 billion pay package that was rejected by a Delaware judge in January, who said that the arrangement was dictated by Musk and was the product of sham negotiations with directors who were not independent of him.

At the time of the Delaware court ruling, Musk's package was worth more than $55.8 billion, but the stock slide has cut that to $44.9 billion at the close of trading on Friday, according to a company filing last week.

Tesla shares hit an all-time intraday high of $415.50 in November of 2021, adjusted for a 3-for-1 stock split that took effect in August 2022.

Tesla sales fell sharply last quarter as competition increased worldwide, electric vehicle sales growth slowed, and price cuts failed to draw more buyers. The company said it delivered 386,810 vehicles from January through March, nearly 9% below the 423,000 it sold in the same quarter of last year.

Dan Ives, an analyst with Wedbush who has been very bullish on Tesla's stock, called the first quarter sales numbers an “unmitigated disaster".

“For Musk, this is a fork in the road time to get Tesla through this turbulent period otherwise dark days could be ahead,” Ives wrote this week.

Yet on Thursday, Deutsche Bank joined other industry analysts in voicing concern over Musk's big bet on autonomous vehicles as it stripped the company of its “buy” rating, citing Tesla's “change of strategic priority to Robotaxi”.

Wall Street expects that Tesla will report a decline in first quarter earnings next week and many are wondering if there's any near-term catalyst for growth that would end Tesla's stock slide. Industry analysts were expecting a new small electric vehicle for the masses that would cost around $25,000, the Model 2, but there were reports last week that Musk was scrapping that project.

Musk disputed the reports, but wrote on X, the social media platform that he owns, that Tesla would unveil a robotaxi at an event on Aug 8.

Uncertainty over the release of a cheaper vehicle from Tesla has altered the equation for analysts like Deutche Bank's Emmanuel Rosner.

Such a delay would tie Tesla's future more closely to “cracking the code on full driverless autonomy, which represents a significant technological, regulatory and operational challenge. We view Tesla's shift as thesis-changing,” Rosner wrote.

Since last year, Tesla has cut prices as much as $20,000 on some models as it faced increasing competition and slowing demand.