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Tesla shares experienced a significant 15% decline on Monday, driven by increasing concerns regarding a potential slowdown in sales, pushing the stock well below the starting point of its previous "Trump bump."
In the broader context, it was a challenging day for Elon Musk, as his messaging platform X was also impacted by a substantial cyberattack.
Tesla's Worst Stock Drop in Years
Despite facing numerous challenges, Musk's controversial position as President Trump's head of DOGE appears to be affecting his business interests more than ever.
In terms of numbers, Tesla shares plummeted by over 15%, marking a staggering 53% drop since their peak on December 23, resulting in a loss of $700 billion in market capitalization.
Currently, the company's stock is more than 11% lower than its closing price on the day Trump was elected.
It's important to note that while the stock market as a whole has faced significant pressures recently due to tariff concerns, renewed inflation anxiety, and slowing growth worries, Tesla's decline has been notably severe. According to FactSet, it has recorded the largest drop of any stock in the S&P 500 year-to-date.
Investor Panic Grows as Tesla Faces Sales Decline and Political Backlash
The news was particularly influenced by two negative analyst reports that unsettled investors on Monday. UBS analyst Joseph Spak highlighted indications of softening Tesla sales, suggesting that these declines could impact the company’s first-quarter delivery goals and full-year profit predictions.
In addition, Baird analyst Ben Kallo shared on CNBC that demand for Tesla vehicles might be adversely affected by recent reports of vandalism allegedly linked to political backlash.
This decline occurred against the backdrop of a tech sector downturn, driven by escalating recession fears that saw the Nasdaq drop by 4% on Monday.
Meanwhile, Musk was also dealing with what he described as a "massive" and "coordinated" cyberattack on X, with tens of thousands of users reporting outages throughout the day.
As we monitor the situation, the specifics of the attack, including its motivation, remain unclear. However, many on social media have connected it to the Tesla demonstrations, suggesting potential political motivations.
In response to one post regarding the attack, Musk seemed to support the theory of a coordinated effort, stating on X:
"We get attacked every day, but this was done with a lot of resources. Either a large, coordinated group and/or a country is involved."
Later, in an interview with Fox Business, he indicated that the attacks seemed to originate from the region of Ukraine.