Tesla continues to depreciate in the market

Tesla shares have dropped by 40% since the end of 2024, with a recent acceleration in the decline, Bloomberg reports. The spread of information about the company's electric vehicle sales in Europe nearly halving has further intensified this process.

Over the past week, shares fell by 17%, indicating that traders are concerned about the slowing of Tesla's automotive business. This is a serious issue since the growth of the company's shares depends not only on fundamental financial indicators but also on investor confidence.

Interactive Brokers Chief Strategist Steve Sosnik:
"The main challenge with highly valued stocks is determining when they will hit their lowest price. Tesla's shares have not aligned with traditional valuation methods for a long time, so they are largely dependent on investor sentiment."

In 2024, Tesla is facing a number of challenges. After the U.S. presidential elections, shares rose as investors believed that the collaboration between Elon Musk and Donald Trump could be beneficial for Tesla. However, in January, the company's quarterly delivery results were below expectations, and for the first time in a decade, annual sales declined, which diminished investor confidence.

The company also reported that it did not achieve the expected profits and lowered its sales forecasts for 2025.

As a result, Tesla's market value fell below $1 trillion, pushing the company behind Berkshire Hathaway and Broadcom.

Currently, no major news is expected to change the market for Tesla. Analysts emphasize that there have been no announcements regarding the company's concrete plans for creating fully autonomous vehicles.

Additionally, Musk's excessive interest in politics is worrying investors, as they want the company's leadership to focus more on business.

The high valuation of Tesla shares remains a risk factor. Their market multiple is significantly higher than the average level of S&P 500 companies, indicating that the shares are overvalued relative to current earnings metrics.

Tesla's decline over the past week occurred against the backdrop of a general market downturn, as the S&P 500 index also fell by 5%.

As a result of all these factors, investors who believe that shares have not yet reached a minimum price are staying out of the market.

The sharp increase in demand for one-month options for safety among traders and the presence of many investors betting on a future decline in Tesla shares also confirm this.

On Thursday, Tesla shares fell another 3% to $280. However, on Friday, in premarket trading, shares rose by 0.4%.