Tesla fans keep buying, unbowed by the $720 billion wipeout
Even the worst year ever for Tesla Inc. shares hasn't shaken individual investors' faith in the electric-vehicle maker and its billionaire chief executive officer, Elon Musk.
Such retail traders have continued piling into the shares, data from Vanda Research show. In fact, they've been strong buyers every day this month, driving their net purchases to record highs in both December and the fourth quarter.
On Wednesday, they appeared poised to get a small reward for their loyalty: Tesla jumped as much as 6.6% soon after the market's open. But the shares gave back almost all those gains by late morning, threatening to extend a seven-day losing streak that has driven them down 70% this year and erased almost $720 billion from the company's stock-market capitalization.
The drubbing has been fueled by rising interest rates that battered growth stocks, worries that demand will erode if there's a recession, and concerns that Musk's acquisition of Twitter will divert his attention and increase his sales of Tesla stock to keep the social-media company afloat. The drop had made it the third-worst performer in the S&P 500 Index this year.
Yet for Tesla's diehard fans among retail investors, the risks to electric-vehicle demand or Musk's preoccupation with Twitter haven't been enough to sour them on a stock that became one of Wall Street's highest fliers during the pandemic.
“Retail investors have bought more Tesla stock over the last 6 months than they have done overall in the 60 months prior to this,” Vanda's senior strategist Viraj Patel said. “For institutional investors, it's a seller's paradise when you have a buyer that is clearly not reading the fundamental signals.”
On Tuesday, Tesla was hit by an 11% slump on fresh
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