The electric vehicle Tesla’s $350 billion maker’s shares are set for their worst first half of the year, dropping 35%, covering a 20% drop in the S&P 500 index, which presents a $350 billion buying opportunity.
Tesla’s $350 billion “Six months ago, Tesla was recognized for its excellence, but now it appears to be a beautiful entry point for long-term investors,” said Robert Shine. Chief investment officer at Blanke Schein Wealth Management.
Elon Musk is struggling with supply chain bottlenecks and rising raw material costs. Then there is the specter of a global economic slowdown, worrying that companies like Tesla need growth.
“Tesla is not immune to anything that happens at the macro,” said Gene Munster.
A former technology analyst now managing partner at Loup Ventures.
But Musk’s public solid engagement with social media platform Twitter Inc. significantly changed Tesla’s situation. Shares fell 37 percent on April 4 when Musk announced he owns a 9.2 percent stake in Twitter and will become the company’s biggest shareholder a week. After he expressed his desire to take over social media to shake up the industry. He later agreed to buy Twitter for $54.20 per share, but the two sides have been negotiating.
Tesla is trading for less than $700 as some investors fear Twitter’s bid will distract Musk. But Shine is optimistic it will approach $1,000 over the next 12 months as supply issues ease. The company continues to improve its balance sheet, and the Musk-Twitter takeover saga ends one way or another.
However, Tesla’s share price held up better than traditional automakers General Motors Co., down 43% in 2022, and Ford Motor Co., down 45%. As a result, Tesla shares are trading about 59 times higher, near their lowest level since mid-2020. For GM, that figure is about five times, and for Ford, about six times.