Tesla Inc. erased all of its gains from the past 17 months as investors continue to sell off the stock in the wake of Chief Executive Officer Elon Musk’s purchase of Twitter Inc.
The electric-vehicle maker’s shares closed down 5% to $197.08 in New York Monday, at the lowest level since June 2021. It was the biggest contributor to the benchmark S&P 500 Index’s losses.
Tesla shares have been struggling for the most part this year, swept up in the broader risk-off market trend. But the latest slide has come amid Musk’s highly public acquisition of Twitter.
Musk closed his Twitter deal on October 27 and has since been tweeting furiously about his many plans for overhauling the platform. Tesla shares have dropped over 12% since then, compared with a barely changed S&P 500 Index and a 1.9% fall in the Nasdaq 100 Index.
Ever since Musk stated his intention to buy the social media platform, Tesla investors have worried about the billionaire spreading himself too thin among several high-profile ventures. In particular, investors want him to focus on Tesla, which itself is going through a challenging time.
Demand for cars is slowing in an inflationary environment, supply-chain troubles still linger and raw material costs are stuck at high levels.