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Tesla Stock Plunged After JP Morgan Warned of Further Losses

On Friday, Tesla Inc.’s shares sank after JP Morgan cautioned of additional losses, saying CEO Elon Musk’s divisive tweets alienated consumers.

The Austin-headquartered electric vehicle (EV) maker’s stock shed 3.63% to $164.90 apiece on April 05, snapping a two-day winning streak. Furthermore, market analysts anticipate a 1.21% slide to $162.90 per share in the coming trading day.

Tesla reported first-quarter sales of 387,000 units, falling 13.81% below the Wall Street estimate of 449,000. In addition, it indicated a decrease of 20.04% quarter-over-quarter from 484,000 in Q4, the first quarterly drop since the pandemic.

Insiders said a growing number of investors blame the tumble on Musk’s constant rants about illegal immigration and diversity hiring. They criticized that their CEO had positioned himself opposite of left-wingers, who are the primary EV-buying demographic.

Moreover, Tesla shareholders are scheduled to vote on a new CEO pay package at the annual meeting on May 16. After a Delaware judge voided the 2018-approved lump sum of $65.00 billion, stakeholders will decide on Musk’s new compensation deal.

Year-to-date, the EV manufacturer’s stock has deteriorated by 33.64% from its final 2023 share price of $248.48. Lastly, its stock suffered a monthly loss of 12.92% in March and 6.20% in the first week of April alone.

JP Morgan Specifies Support Level Limit for Tesla

JP Morgan noted that Tesla can recover if it does not fall below the critical support point of $150.00 apiece. Otherwise, traders might stop perceiving it as a hyper-growth company, which may considerably erode its stock market capitalization.

Earlier this month, the American EV brand announced another round of price cuts for its most popular offerings. The Long-Range AWD, Model Y’s most expensive version, will retail at $37,500.00, 30.93% cheaper than the base version’s $54,290.00 price tag in August 2021.

According to JP Morgan, the rapid depreciation in the value of Tesla EVs makes them a terrible investment. Hence, the automaker must find a different way to attract first-time buyers aside from aggressive price cuts.

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