Many people believe Wall Street only cares about volumes and margins. This is why Tesla appears to underperform in the current economy. Much has been talked about how the massive price cuts in January 2023 have compromised the company's capitalization because the analysts look at the shrinking margins and lower demand expectations. However, it's a different story when you look at Tesla's stock evolution over the years.
Tesla stock was already performing at its worst in December 2022, right before the price cuts. On January 6, Tesla shares traded for $113, the lowest since 2020. However, the downtrend reversed after Tesla discounted all its EV models on January 11, 2023. This is interesting, showing that many Tesla investors understood that cutting prices is not the doom and gloom situation others predicted.
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