Tesla Stock Decline in 2022 has Raised Eyebrows
It’s been bad for Tesla’s stock to decline. However, in 2022, this company has torn down even more investor wealth.
By market-value decline, Tesla ranks fourth among the worst S&P 500 stocks for 2022. This occurs amidst all the suffering caused by Elon Musk’s Twitter diversion.
The CEO of Tesla made a strong statement this week in an attempt to defend the company’s dismal stock performance in 2022. The EV giant’s stock price has fallen by 61% just this year. Tesla now ranks 11th worst among stocks in the S&P 500 for worst performance in 2022 as a result of the sharp decline.
Elon Musk stated in a tweet that “The stock drop has been influenced by the fact that people are increasingly compelled to move their money out of stocks into cash as the interest rates on bank savings accounts, which are guaranteed, start to mirror stock market returns, which are “not” guaranteed.
If you believe that the stock decline in Tesla has destroyed more investor wealth than any other stock in the world by 2022, you need to change direction.
While market capitalization has decreased, common-share values of companies have increased significantly, with Tesla TSLA ranking as the “fourth worst-performing stock in the benchmark S&P 500 as of” 1 p.m. ET on December 21, 2022.
Stocks from numerous companies, including Tesla Inc., Apple Inc., Amazon.com Inc., Microsoft Corp., and Meta Platforms Inc. Class A, among others, have underperformed the entire S&P 500, which has dropped 19%, excluding dividends.
More shareholder wealth has been lost by Amazon.com Inc. AMZN in 2022 than “any other publicly traded company.” Investors in Amazon collectively lost $804.6 billion in 2022. This stock decline totals 48%.
“By virtue of their size”, companies like Apple Inc. (AAPL) and Microsoft Corp. (MSFT) have seen greater “market-cap declines than Tesla.”
As the company approached the conclusion of its exceptional yearlong initiative to build out its storage facility and fulfillment infrastructure, Amazon reported a net loss of $3 billion for the first three quarters of 2022. In terms of profitability, 2021 seemed promising for Amazon. Amazon generated $19 billion in revenue in just three months. The company is slowly and carefully working toward a “cost structure that is strong for the business moving forward”, according to CEO Andy Jassy, who made the statement during the announcement of Amazon’s third-quarter results.
While its web services business is facing growing competitive pressure from rivals like Microsoft and its clients are backing away, Amazon’s significant growth in the cloud business has stagnated and frustrated demands the company had honed on Wall Street. Amazon’s retail sales have also been disappointing as Christmas and the holiday season approach.
Amazon’s stock has dropped 22% since Oct. 27, when it last closed at $110.96. This occurs just before it disappointed investors with both its outlook and third-quarter results; it anticipates breaking “even during the holiday quarter.”
In contrast to Amazon, Tesla saw sales increase by 58% and earnings per share nearly triple during the first three quarters of 2022 compared to the same period in the previous year.
This has been a time of notable stock declines for large tech-oriented companies. Companies that had previously traded at high price-to-earnings valuations have suffered significantly. Tesla and Amazon are two of these businesses. Even their stock market gains from the pandemic era have been forfeited.
You might be wondering how much of the decline in Tesla’s share price was caused by Musk’s decisions as CEO of Twitter, which he procured on October 27 after a protracted saga. Tesla had a great first three quarters of 2022. And if Musk does, as is predicted, resign as CEO of Twitter, how big of a relief rally, if any, could there be for Tesla?
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