Elon Musk’s star is fading, in the firmament of the planet’s great fortunes. Once sacred the richest man in the world, the capricious billionairefounder of Tesla and successful entrepreneur (Paypal, SpaceX…), had to give up his crown in Bernard Arnault (main shareholder of LVMH, whose market value has just risen to 400 billion euros). And this, against the backdrop of the descent into hell of the Tesla stock, divided by 3 from the historical peak recorded in November 2021, when the stock market value of the American electric car giant was 13 figures (with a capitalization well above 1 trillion of dollars).
The very negative trajectory of Tesla on the stock exchange was rightly anticipated by Momentum, Capital’s premium investment letter and newsletter on the Stock Exchange, which promptly alerted its subscribers to the risk of a sharp drop in the stock (in particular on the basis of thetechnical analysis), a few months ago. The descent into hell of the Tesla stock is due to multiple factors. Overview.
Despite a record profit, Tesla is not expected to pay taxes this year in the US
Firstly, the automotive market is under pressure and its prospects are at half mast. “It will remain very difficult in the next few years,” predicts Nicolas Domont, of Optigestion, interviewed by Capital. And this, after the already difficult years 2020, 2021 and 2022, marked by the Covid-19 pandemic and its fallout on the economy, the closure of China (which has only recently turned its back on its strict zero-Covid) and the deterioration of the world economy against the background of the war in Ukraine and the explosion of inflation (which weighs on the purchasing power of households and weighs on their consumption, including that of electric vehicles despite the growing market share). “Disruptions in the production logistics chain, shortages of parts and shortages of semiconductors have hit the entire automotive industry hard,” notes Nicolas Domont in this regard.
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Tesla has not been spared, especially since China is an important link in its global presence. And Chinese automakers are currently experiencing a surge. They will overshadow Tesla and other Western automakers in the coming years. “The imminent intensification of Chinese competition will lower selling prices vehicles, which will hurt the margins of Tesla and other manufacturers. Tesla is gradually losing its premium side, as the offer of Chinese competitors tends to expand. As the supply of quality electric vehicles increases relative to the demand, selling prices tend to decrease. And the Tesla Model 3 is not spared from this phenomenon,” underlines Nicolas Domont.
Elon Musk, Jeff Bezos… will billionaires soon be taxed much more in the United States?
In the fourth quarter of 2022, Tesla disappointed financial analysts with deliveries of its vehicles, which fell short of expectations despite aggressive sales price cuts. And the prospects, degraded, are uncertain. For 2023, the specter of recession is expected to weigh on demand for electric vehicles, worrying equity investors.
The latter also sanctioned a minor involvement ofElon Musk in the management of Tesla, the billionaire busy straightening out Twitter. And to finance this big acquisition, Elon Musk also had to sell tens of millions of Tesla shares, thus mechanically increasing the pressure on the automotive giant’s stock market. According to data from VerityData, Elon Musk sold a total of 94,202,321 Tesla shares in 2022, at an average price of $243.46 per share, for pre-tax revenue of approximately $22.93 billion. Overall, Musk has sold nearly $40 billion worth of Tesla stock since the all-time high in November 2021.
“Excluding taxes relating to the exercise of stock options, and in the absence of a specific stock transfer tax for the TexasElon Musk will have to pay a 20% tax on Tesla shares sold in 2022 under federal capital gains tax,” notes Jean-François Fliti, partner at Allure Finances interviewed by Capital. A perspective that should compel Elon Musk to write a $ 4.59 billion US IRS tax checks…
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