Elon Musk has a very simple explanation for why Tesla Inc (NASDAQ: TSLA) continues to sell-off this year – the macroeconomic backdrop!
Here’s what Musk said in his recent tweet
That’s in sharp contrast to many who attribute the weakness at least partly to him overspending time at Twitter. Taking no responsibility, though, the billionaire wrote in his recent tweet:
In simple terms:
As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop.
— Elon Musk (@elonmusk) December 20, 2022
Musk has said several times in recent months that the U.S. central bank is being too aggressive with lifting rates, thereby increasing the probability of a meaningful recession in 2023.
On the Twitter front, he’s confirmed plans of stepping down as soon as a successor is brought onboard. But that may not be enough to cure the stock price weakness, as per Gordon Johnson – the Founder and Chief Executive of GLJ Research.
He’s convinced the Tesla stock is not worth buying even if Musk exits his role at Twitter as Invezz reported here. Shares of the electric vehicles manufacturer are now down 65% year-to-date.
Tesla is reportedly planning on cutting more jobs
Also on Wednesday, an Electrek report said the EV company is executing a hiring freeze and plans on cutting more jobs in the first quarter of the coming year.
Details of the layoff, including what roles will likely be affected were not revealed. Sharing her cautious stance on the Tesla stock, Hightower’s Stephanie Link said this morning on CNBC’s “Squawk Box”:
I have always been worried about the competition from the legacy OEMs and all the products that are coming out. Then you have the Twitter noise on top of that. And this is not the kind of environment to own a high PE stock.
Despite the sell-off that’s wiped $800 billion of its market value, Link does not see Tesla Inc as inexpensive per se.
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