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Tesla stock has now seen one of its largest drawdowns in history

Tesla stock is in the midst of largest drawdown since the company went public back in 2010.

Shares of the EV maker are down 64% from a peak last November, marking the stock’s largest drawdown since its market debut, according to data from Compound Capital.

The recent 407-day stretch of selling pressure has eclipsed the 60.6% drop from a peak seen over the 28 days from Feb. 19, 2020 to Mar. 18, 2020 (chart below), when the onset of the COVID-19 pandemic rocked markets worldwide.

More recently, Tesla stock is down 22% in December alone.

The bottom has dropped out of Tesla’s stock price. (Compound Capital)

The declines for the once-bankable automaker reflect several factors.

First, the risk of operational miscues at Tesla has grown as Musk focuses on restructuring Twitter.

“Musk has gone from a superhero to Tesla’s stock to a villain in the eyes of the Street as the overhang grows with each tweet,” Wedbush Managing Director Dan Ives, who has become increasingly critical of Musk in 2022, told Yahoo Finance.

Concerns also remain around manufacturing issues and the pace of sales for Tesla in China amid an uncertain approach to the country’s COVID-19 policies.

Finally, competition in the EV space in the United States has only intensified this year — raising the risk of slowing growth for Tesla in 2023 and beyond.

SpaceX Chief Engineer Elon Musk takes part in a joint news conference with T-Mobile CEO Mike Sievert (not pictured) at the SpaceX Starbase, in Brownsville, Texas, U.S., August 25, 2022. REUTERS/Adrees Latif

SpaceX Chief Engineer Elon Musk takes part in a joint news conference with T-Mobile CEO Mike Sievert (not pictured) at the SpaceX Starbase, in Brownsville, Texas, U.S., August 25, 2022. REUTERS/Adrees Latif

On the first and most immediate issue, others on the Street agree with Ives that the debacle at Twitter is the most pressing issue for the stock right now and will likely remain that way well into 2023.

“Tesla’s brand has become more polarizing,” Goldman Sachs analyst Mark Delaney said in a note this week. “We believe that Tesla’s brand has significant value related to the company’s leadership position in clean energy and advanced technology. Having consumer focus related to Tesla shift back to these core attributes of sustainability and technology will be important in our view if Tesla is to meet or exceed long-term investor expectations for Tesla.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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