Tesla Stock Hits a Low Point as Musk Sues Openai - Is This Year a Total Write-Off?

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Occasionally during the course of industrial progress, there is a maverick; a voice that is known for continual disruption and maintaining a high-profile position whilst engaging in such disruption.

The figure of this decade is Elon Musk, a self-starter whose bluster and direct prose cast him as one of the world's most outspoken individuals, as well as a business magnate who manages to influence the financial markets at the click of a button.

From generating unprecedented waves in the cryptocurrency markets in 2021 to causing the motor industry to break with its 130-year-old tradition of using internal combustion as a main method of motive power, Elon Musk's market-making abilities are in line with his disruptive commentary and social media activity.

This set of characteristics has led to volatile stock in the most famous company, Tesla, founded and led by Elon Musk. With regard to such volatility, the start of this week is no exception.

Tesla stock is currently nosediving and has reached a low point of $162.20 by March 14. At the close of the US trading session on Friday, March 15, Tesla stock had retrieved some of the losses and rested at the mid-$163 range, however, this represents a mere slowing down of the plunging of Tesla stock prices because ever since the beginning of this month, Tesla stock has been depreciating at a considerable rate.

Indicative pricing only

Indeed, looking at the year so far as a whole, Tesla stock is down by 34% according to certain mainstream analyses, and when looking back to the beginning of that period, the stock has fallen tremendously. On December 27, Tesla stock was trading at $260.70.

Aside from the overtly colourful nature of Tesla's CEO and the natural association between his voice in the media and Tesla's corporate progress - for example, he managed to establish Tesla as a 'crypto whale' without any pushback from shareholders, making it the only publicly listed company in the world which holds vast sums of cryptocurrency - there have been some unfortunate occurrences recently which may be contributing to the current position.

Once again, Elon Musk has been drawing his personal perspective into the commercial arena, having issued litigation against OpenAI and its CEO Sam Altman, which he invested in at its initial stage. Elon Musk claims in his lawsuit that OpenAI and Mr. Altman, the creators of ChatGPT, are going against the firm's founding aims of benefiting humanity rather than pursuing profits.

Additionally, just after the reopening of the Tesla manufacturing facility in Germany, reports have emerged that there has been a suspected arson attack at the plant. This may lead to investor discourse because motor manufacturers, despite the seemingly decades-old environmental lobby which turns its attention to vehicles as a cause of pollution, absolutely no attempt to even boycott a motor manufacturer has taken place, let alone try to burn a factory down.

This could lead to the assumption that such an attempt would be the result of disagreement with Elon Musk's characteristics and viewpoints and, therefore, may be a factor in decreasing share prices.

Overall, Tesla has become an outcast among its big-cap North American 'Magnificent 7' peers, all of which are commercial giants at the very top of their sector and have a dominant position in global business.

Volatility is the order of the day when it comes to Tesla. The question remains whether the stock will pick itself back up soon, or if the blustery persona of Elon Musk is a bugbear for investors. Equally, the woes affecting the German factory are now behind it, so as production increases, what will show on the balance sheet that affects share prices?

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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