6 Reasons Why Tesla’s Stock Falling

6 Reason Why Tesla's Stock Falling

In this post, we will know why Tesla’s stock falling and will also see 6 reasons behind it. Tesla’s stock has lost 20% in the last 1 month and more than 50% in the last 1 year, and this is a matter of concern for the shareholders.

Now let’s see what is the reason behind the fall in this stock.

1. Semiconductor Shortage:

Semiconductor Shortage
Semiconductor Shortage

There are only a few select companies manufacturing semiconductor chips around the world, which meet the demand for these semiconductor chips, but the demand for these semiconductor chips has been high for some time now, but production is not happening. So fast, that’s why semiconductors face a shortage.

This semiconductor is also used in Tesla’s electric vehicles but the semiconductor chip is not in the market And if it is, it is very expensive That’s why the production quantity is decreasing and that’s why the delivery of vehicles is also decreasing.

2. Lockdown in China:

Lockdown in China
Lockdown in China

China is a very important country for Tesla company because In this country, a large part of the total production of Tesla cars is manufactured, with this country holds more than 25% of the total revenue of Tesla company. That’s why due to the zero covid policy of China Govt, many times there are lockdowns and that is why there is an impact on the production quantity and If the production is low then there can be an impact on indirect revenue and profits as well.

3. Twitter Acquisition Deal:

Twitter Acquisition Deal
Twitter Acquisition Deal

Elon Musk’s Twitter deal has become a disaster for Tesla because this deal changed the focus of Musk and also this Musk had to buy Twitter at a very high price, i.e. 44 billion.

For this deal, Musk also had to sell his Tesla stocks and It is told by reports that Musk sold stocks ranging from $2 billion to $15 billion worth and It then sold an additional 19.5 million stocks on November 7 and November 8, worth a reported $3.95 billion. If we go to see this, till now Musk must have sold stocks worth $20 billion, this news has come through reports.

4. MFs & Rating Agency Rate Underperformance:

MFs & Rating Agency Rate Underperformance
MFs & Rating Agency Rate Underperformance

Recently Tesla stock has been downgraded by major rating houses and brokers and stocks are being tagged as underperformers by leading mutual funds. This is also one of the reasons why Tesla’s stock is falling.

5. Overall Technology And IT Sector is Bearish:

Overall Technology And IT Sector is Bearish
Overall Technology And IT Sector is Bearish

It cannot be forgotten that there has been an overall recession in the technology or IT sector for some time and people are being fired from companies, so this should also be taken care of and it will affect Tesla’s stock somewhere is.

6. Too Eager Valuation:

Too Eager Valuation
Too Eager Valuation

This is also a very important issue because Tesla’s stock went higher after the Covid 19 crisis and this stock is worth a lot, so the stock has fallen more than usual.

Now we have seen the reason behind the fall in the stock, now the question comes, what should be done?

According to us, the financials of the company are fine now, there is nothing wrong with it, but there is a matter of concern over the coming financial performance but it will not affect the long term investor who has bought this stock for long term then you can continue with high risk high return.

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