Shares of Tesla have dropped more than 17% this week.
Andrew Caballero-Reynolds/AFP via Getty Images
Recent declines in Tesla stock have deviated from market-related trading patterns, leaving investors wondering if something else is going on with shares of the auto maker.
Tesla stock (ticker: TSLA) dropped 7% Wednesday. Coming into Thursday trading, shares were down more than 17% over the past week, a bigger fall than in the broader market. The Nasdaq Composite and Russell 1000 Growth Index are both down roughly 8% over the same span. Concerns about the crisis in Ukraine and the Federal Reserve’s move toward tighter monetary policy have weighed on the stock market.
But something else appears to be unnerving investors. CEO Elon Musk appears to have picked another fight with the Securities and Exchange Commission. Musk is voicing his displeasure on Twitter, where he has more than 74 million followers.
On Tuesday, Musk responded to a post on Twitter that linked to an article that claimed the SEC leaked information related to its investigation of the CEO. Musk said: “This is just peeling back the first layer of the corruption onion. Stay tuned…”
Musk’s post on Twitter came days after a lawyer representing him sent a letter to U.S. Southern District of New York Judge Alison Nathan that claimed the SEC “is out to retaliate against my clients for exercising their First Amendment rights.” The three-page letter, dated Feb. 21, was reviewed by Barron’s.
Then, on Wednesday, Musk took to Twitter again, saying he didn’t start the fight with the SEC, but that he would “finish it.” He also responded to another post that suggested the SEC colludes with hedge funds with the word “Exactly.”
The SEC declined to comment on the tweets. Tesla didn’t respond to Barron’s request for comment.
“In a risk-off moment Musk’s antics are troubling for investors,” Wedbush analyst Dan Ives tells Barron’s. “The SEC issue is an overhang but ultimately Musk has created this situation himself and his lack of situational awareness with the first war in Europe since World War II and investor angst very high.” Ives is a Tesla bull, rating shares Buy. His price target is $1,400 a share.
Investors don’t love distractions. The issues with Musk, his Twitter, and the SEC are just that. Tesla stock was down 3.4% in early trading Thursday, at about $738 a share. The S&P 500 was down 2% as markets worldwide churned in response to Russia’s attack on Ukraine.
Write to Al Root at allen.root@dowjones.com
Source: finance.yahoo.com