Elon Musk tries to calm employees after Tesla shares slump

Tesla Inc Chief Executive
Elon Musk has told employees that they should not be “bothered by
stock market craziness” after the company’s shares fell nearly
70 percent this year on jitters over softening demand for electric
vehicles and Musk’s distraction with running Twitter.

In an email sent to staff on Wednesday and reviewed by
Reuters news agency, Musk said he believes that long term, Tesla will be the
most valuable company on earth.

“Btw, don’t be too bothered by stock market craziness. As we demonstrate continued excellent performance, the market will recognise that,” Musk said.

“Long-term, I believe very much that Tesla will be the most valuable company on Earth!”

He also urged employees to ramp up deliveries at the end of
this quarter, after the automaker offered discounts on its
vehicles in the United States and China.

“Please go all out for the next few days and volunteer to
help deliver if at all possible. It will make a real
difference!” he said in the email.

Record fall

Tesla is set to round off 2022 with a 68 percent drop – the most among the big US technology firms – as fears mount over slowing demand in China and top boss Elon Musk’s growing distractions with Twitter.

About 2.85 percent of Tesla shares, or $8.36 billion, are shorted, according to financial analytics firm S3 Partners, adding that short selling was up by more than 8.98 million shares this year due to a drop in the stock price, which was partly driven by Musk’s share sales to fund his Twitter purchase.

Analysts expect Tesla to deliver 442,452 vehicles in the
fourth quarter, according to Refinitiv data.

Tesla’s plummeting share price has hurt the value of shares
owned by the electric vehicle (EV) maker’s employees. Tesla has offered stock
compensation for most employees including factory workers.

The company’s shares rebounded on Wednesday, following an
11 percent slump in the previous session on a Reuters report that the
automaker planned to run a reduced production schedule in
January at its Shanghai plant. The news sparked worries of a
drop in demand in the world’s biggest car market.

Morgan Stanley analysts cut their price target on the stock to $250 from $330, saying the last two years of demand exceeding supply will be “substantially inverted to supply exceeding demand” in 2023.

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