To say that 2022 was a nightmare for Tesla investors is an understatement.
The numbers don't lie: Tesla's (TSLA) stock price fell 65%, translating to a drop in market value of about $725 billion.
For investors in the manufacturer of the Model Y SUV and the Model 3 sedan, it was a bloodbath. And many of them blamed Chief Executive Elon Musk, an unprecedented occurrence because for a time these attacks looked like a mutiny. Some investors went so far as to call on him to step down.
"I am 100% in Tesla bc I believe in Elon Musk and Tesla," Leo KoGuan, a Chinese-American investor who claimed to be Tesla's third largest retail shareholder after Musk and Oracle Co-Founder Larry Ellison, wrote on Twitter on Jan. 7. "But he is killing SH and Tesla. If I knew I wouldn’t invest in Tesla."
"Elon invested ≈$200mm but took out $40B, Larry invested $1B, I invested over $3B, I have no choice but to act and speak out. I cry out to U for help!"
A Boon for Short-Sellers
Shortly before KoGuan, Ross Gerber, another Tesla investor, was quick to hold Musk responsible for Tesla's stock-market crash.
"Elon has now erased $600 bil of tesla wealth and still nothing from the Tesla [board of directors]," he tweeted on Dec. 16. "It’s wholly unacceptable."
Musk attributed the stock market disaster to macroeconomic factors like the Federal Reserve's aggressive interest-rate hike to fight inflation and the energy crisis in Europe. But many Tesla holders, including KoGuan and Gerber, believed at the time that his $44 billion acquisition of Twitter last October was the big problem.
They claimed that when Musk set his sights on buying the social-media platform, he left Tesla behind. Worse, he had alienated many Tesla buyers by regularly attacking progressives and Democrats on Twitter. Liberals are considered the base of Tesla clients.
While Tesla's individual investors were outraged, short-sellers -- investors who bet that stock prices will decline -- were celebrating: Short-sellers made some $15.75 billion in mark-to-market profits last year, according to Ortex. This represents a return of more than 80% on the $19.6 billion invested in short positions on Tesla in 2022.
But this year, things have changed. Tesla shares have rebounded strongly, benefiting from the group's and Musk's optimism.
At the end of January, the carmaker said that this year it was aiming to produce 1.8 million vehicles, which would be nearly a third (31%) more than last year. Tesla has also launched a price war by slashing its car prices to gain market share.
'Buy When Others Panic': Musk
Tesla stock is up nearly 47% this year. But Musk says Tesla's stock-market rally will turn into a mad ascent. Or so he just suggested during a thread on Twitter. In this conversation, a Twitter user who claims to be a Tesla investor predicts that in 10 years, those who haven't invested in Tesla will have big regrets.
"In 2033, when you hear people lament 'I wish I'd bought $TSLA 10 years ago', don't pity them," the Twitter user said. "Given the amount of information available today, there are no excuses for an investor missing out on $TSLA. Everything you need to know to deeply understand the opportunity exists NOW."
Unsurprisingly, Musk thinks the time to invest with Tesla is now because the stock price is low.
"Buy when others panic, sell when they’re irrationally exuberant," he advised.
Last October, the tech tycoon took everyone by surprise when he predicted that Tesla would be valued at more than Apple (AAPL) and Saudi oil giant Saudi Aramco combined. At the time Apple and Saudi Aramco were the world's two largest companies by market value.
Apple was the world's most valuable, with a market value of $2.34 trillion at the time, according to companiesmarketcap.com. Saudi Aramco, which was benefiting from soaring oil prices, had a market value of $2.1 trillion. Between them, the two largest companies in the world were valued at $4.5 trillion.
Musk thus was suggesting that Tesla's valuation would reach at least $4.5 trillion in the next few years. He did not give a timeline.
Apple remains the largest company, with a market value of $2.53 trillion. Saudi Aramco fell to third place with a market value of $1.93 trillion. Microsoft (MSFT) is second with a market value of $2.1 trillion. Tesla has a market capitalization of $572 billion, making it the eighth largest company in the world.
