Following Elon Musk’s acquisition of Twitter, skepticism rose over Tesla’s (TSLA) -) fate as Musk took on another giant. Despite initial turbulence, the company’s inclusion in the Magnificent Seven and a CEO change led to a solid 2023, with Tesla ultimately outshining the S&P 500. TheStreet’s J.D. Durkin dives into Tesla’s rollercoaster year and the road ahead for the EV giant.
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Full Video Transcript Below:
J.D. DURKIN: Ever since Elon Musk purchased Twitter last year, Wall St. – and the world – has wondered how well the globe’s wealthiest person could balance yet another business. After all, he was adding a social media giant to a portfolio that already included names like SpaceX, Neuralink, and the Boring Company – each one at a scale that typically demands its own, devoted CEO. And in case all of that weren’t enough, Musk also has, of course, Tesla – the only publicly-traded company under his umbrella of brands, listed on the Nasdaq in 2010.
Elon Musk purchased Twitter on October 27, 2022 – quickly appointing himself the “Chief Twit” in the process. At the time, many Tesla bulls warned that Musk would be too distracted to focus on his revolutionary EV carmaker.
The impact on Tesla stock was swift, as shares fell 45% in the first few months alone. Eventually, he did name a new CEO for the newly-rebranded “X”: ad executive Linda Yaccarino. That paved the way for 2023, as Tesla was included in what most investors refer to as “the Magnificent 7” – a collection of splashy, pro-growth stocks that together account for nearly 30% of the entire S&P 500. As the Magnificent 7 goes, so too goes the market… and Tesla has significantly outperformed the S&P, up over 100% in 2023.
And that stock price success comes despite a mountain of self-inflicted controversies by Musk himself. The New York Times reported in March that Twitter’s value had fallen from the $44-billion Musk paid for it, down to $20-billion. Musk then attacked the Anti-Defamation League, and was quickly accused of anti-Semitism on the platform as well.
Although Tesla stock has undoubtedly been a leader in the S&P 500, it has had its dips. After a lackluster earnings report in October, the stock fell more than 9%, with Musk saying that previously-announced price cuts were ineffective with interest rates so high. The company also saw deliveries fall by almost 7% from Q2 to Q3. Tesla – and the entire stock market – rallied soon after during a dominant November.
The company continues to innovate, ending 2023 with the first of its highly-anticipated Cybertruck deliveries for customers. Tesla has also modified the prices for its popular Model 3 and Model Y vehicles, further solidifying its status as the top dog of U.S. EV manufacturing. There’s little doubt that despite a dizzying portfolio of companies under Elon Musk’s reign, Tesla will continue to be one of the most-watched stocks in 2024.
