Tesla
Value of Tesla declined nearly $200 billion since mid-July
The Tesla had surged about 170% to peak at $291 on July 19 but has since lost about a fifth of its value. Tesla’s market cap declined almost $200 billion to about $730 billion as of Tuesday’s close, per Google Finance.
A mix of inflation, higher interest rates, and recession fears have driven Tesla’s decline. Investors are bracing for Federal Reserve chair Jerome Powell’s speech Friday for clues about its next steps.
The Fed has already raised elevated borrowing costs from near-zero to more than 5% over the past year. Some fear that any more rises could trigger a recession, given inflation is not too far above the Fed’s 2% target at 3.2% annually.
A mix of inflation, higher interest rates, and recession fears have driven Tesla’s decline. Investors are bracing for Federal Reserve chair Jerome Powell’s speech Friday for clues about its next steps.
The Fed has already raised elevated borrowing costs from near-zero to more than 5% over the past year. Some fear that any more rises could trigger a recession, given inflation is not too far above the Fed’s 2% target at 3.2% annually.
Higher interest rates tend to be bad news for high-growth stocks, including Tesla, because it eats away at the company profitably through expensive borrowing costs. Investors also get deterred from piling into equities as rising interest rates tend to push up returns on bond investments, making them a safer investment compared to stocks.
1/4 Hey @elonmusk… your inventory of Model Y, Model 3, & Model X cars are exploding in the U.S. (left chart below), as well as the RoW (right chart below), despite the fact that utilization at $TSLA's Fremont, TX, & Berlin plants in 2Q23 was ~91.9%, ~60.1%, & ~48.3%,… pic.twitter.com/9iNkXEvkgs
— Gordon Johnson (@GordonJohnson19) August 16, 2023
He questioned whether that could force Tesla to cut prices again. Since Cathie Wood said on CNBC on June 9 that Tesla shares could be worth as much as $2,000, Johnson said she’d reduced Ark Invest’s holding by 936,000 shares, or more than 17.6%. “It seems, even your biggest supporter in @CathieDWood is losing hope.”
Turkish President Tayyip Erdogan asked Tesla CEO, Elon Musk to build a factory inside Turkey, confirmed a top official from his government.
Many people in the Turkish government want Musk to choose the country as the spot for the next Tesla factory. The report also cites that the EV maker is already purchasing required materials from Turkish suppliers.
Previously, Musk and Erdogan talked about cooperation on AI and Starlink satellite internet. Turkish communications directorate elaborated that SpaceX has already applied to obtain a license for Starlink internet service in Turkey.
(Reuters)
