Tesla gives up the ribbon of its $ 1 trillion value at the end of the year

(Bloomberg) – Tesla Inc. ended its roller coaster year with its first monthly decline since May as investors digest CEO Elon Musk’s sell-off of shares, a recall affecting hundreds of thousands of electric vehicles and a shortage of some key parts.

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The 7.7% drop in the stock in December is hardly a disaster for Tesla, whose 50% annual gain makes it one of the few companies in the world with a market value exceeding $ 1,000 billion. The shares retreated from the November record as Musk offloaded some of his stake, after conducting a Twitter poll on the idea and then saying he would sell 10% of his holdings.

The stock, which closed at $ 1,056.78 per share on Friday, fell more than 21% this month through Dec. 20, briefly sending the company back below the $ 1,000 billion mark. Musk said in a Dec. 22 tweet that its sales were “almost over,” with the stock following its strongest four-day run since March.

“Musk stock sales and the continuing chip shortage have prompted some investors to hit the sell button after another great year for the stock,” Wedbush analyst Dan Ives wrote in a post. The risk-free environment has encouraged some investors to reduce their exposure, he said.

Representatives for the Austin, Texas-based company did not immediately respond to an email request for comment.

Safety reminder

Tesla lost ground this week when it recalled 475,000 cars in the United States – almost the equivalent of its global deliveries last year – over safety flaws. Global Equities Research analyst Trip Chowdhry said the recall is a “non-event.” Reuters reported similar action in China involving 200,000 vehicles.

Tesla workers, meanwhile, are in the final hours of a push to complete record quarterly deliveries. This is a data point that investors will be watching closely in early January.

Analysts are divided on the future of the stock, with 22 buy notes, 14 sell notes and 12 in between pending. The average price target of $ 863 is approximately 18% below Friday’s closing price.

Ives, who has an outperformance rating on the stock and a price target of $ 1,400, sees 2022 as a “major inflection year” as demand for electric vehicles increases. He said the stock could rise by around 30% next year.

Morningstar analyst Seth Goldstein, who has a sell rating and price target of $ 680, said the market viewed sales of CEO shares as a sign that Tesla is overvalued, and that some investors might take profits after what has been a “good year”. Goldstein is forecasting lower vehicle deliveries than the current share price implies.

“Tesla will open two new factories, which will have higher start-up costs and initial operating costs, which will likely weigh on profitability,” he said by email. “However, consumer demand for their vehicles remains strong, so it will be interesting to see how investors assess vehicle growth against potential near-term declines in profit margins.”

(Updates with closing prices)

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