TECH - Cult Of Tesla Crumbling: Early 'Die-Hard' Backers Bail As Musk's EV Empire Faces Reality Check Amid Stock Slump | Benzinga
Tesla, Inc. (NASDAQ:TSLA) shares have been on a downward trend for over two years, underperforming the broader market. A recent report suggests some early backers are losing faith amid the company’s flailing fundamentals.
What Happened: John Belton, a portfolio manager at Gabelli Funds, believes Tesla’s stock price is disconnected from its fundamentals, according to Reuters. “We think the stock works best when there are auto company fundamentals that justify the stock price,” he added.
Gabelli Funds entirely sold its Tesla holdings by the end of the first quarter of 2024. It previously held 65,900 shares valued at $16.37 million at the end of the fourth quarter of 2023.
Slowing Growth & Shifting Strategies
Tesla’s robust sales growth, even during the pandemic, began to slow in 2022, reflecting industry-wide trends and weaker economic conditions impacting discretionary spending. Price cuts implemented to boost volume failed to significantly improve margins.
Investors who witnessed the meteoric rise coinciding with the Model Y launch in early 2020 have largely held on despite the recent downturn. However, their patience is wearing thin.