Al Root
The selloff in Tesla stock deepened Monday as investors fretted over CEO Elon Musk's DOGE distraction amid declining sales at his car company.
The stock is now in "support discovery mode," with investors looking for a bottom after all the recent declines.
Shares of the electric vehicle maker were rising 2.9% in premarket trading Tuesday at $228.55. S&P 500 and Dow Jones Industrial Average futures were up around 0.4% and 0.3%, respectively.
The company's stock plunged 15.4% on Monday amid a broad market selloff. The Nasdaq Composite lost 4%. A report from UBS analyst Joseph Spak added to the market-based pain for Tesla investors. Spak cut his full-year delivery estimate to 1.7 million vehicles, far below the 2 million Wall Street expects. Spak cited weak early-year sales data.
He rates shares Sell and has a $225 target price for the stock.
After the close of trading Monday, CEO Elon Musk met with Fox Business' Larry Kudlow. The two men talked about savings and the goals of President Donald Trump's newly created Department of Government Efficiency, which Musk directs. The conversation eventually turned to Musk's businesses and how he is running them.
"With great difficulty," answered Musk, adding he is likely to spend another year in Washington, D.C., on DOGE business.
That could further unnerve Tesla investors, who constantly worry that Musk has too much to do. Along with Tesla and DOGE, he runs X, xAI, SpaceX, The Boring Company, and Neuralink.
How much worse it can get is an open question. Coming into Tuesday trading, Tesla stock was down more than 50% from a record closing high of almost $480 a share reached in mid-December.
President Donald Trump knows it's getting bad. Early Tuesday morning, he said he was buying a Tesla. "The Radical Left Lunatics, as they often do, are trying to illegally and collusively boycott Tesla, one of the World's great auto makers," wrote the president on Truth Social. "Why should [Musk] be punished for putting his tremendous skills to work in order to help MAKE AMERICA GREAT AGAIN???"
Market watchers have differing views.
"At this stage, I think it's clear that nothing [technical] has mattered, " said CappThesis founder and market technician Frank Cappelleri. He uses stock charts and market history to get a sense for where investors have bought and sold Tesla stock in the past. The charts aren't much help lately.
"With every trendline, retracement level, former high or low and moving average being sliced through, the stock is in pure support discovery mode now," added Cappelleri. Support represents somewhere investors have stepped in to buy shares and arrest a decline.
Where support will emerge is tough to say. "At some point a new reference point will be established," said Cappelleri. "I'd rather miss the low rather than try to guess where the stock will stop falling."
That sounds ominous. One Wall Street analyst recommends patience.
"[We've] been here before many times with Tesla. Our thesis and bullish view [is] unchanged," wrote Wedbush analyst Dan Ives in a Monday report.
He still believes Tesla is a "transformation growth story" with AI and self-driving technology unlocking trillions in value. "This is the start of the biggest innovation and technology cycle in Tesla's history ahead over the next few years," wrote Ives. "Is this a pleasant time for Tesla bulls? NO. Clearly the Musk DOGE distractions/brand issues have taken on a life of their own."
He rates shares Buy and has a $550 price target for the stock.
Patience is a virtue, but it's hard to exercise when big losses mount rapidly.
Write to Al Root at allen.root@dowjones.com
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March 11, 2025 07:16 ET (11:16 GMT)
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