Tesla's stock has performed the worst in the S&P 500 this year.

A detailed review of Tesla's shareholder performance and CEO Elon Musk's role in 2021. The company's stock faced significant challenges last year, while Musk remained in the spotlight for his actions.

The year 2021 wasn't a smooth ride for Tesla, especially when it comes to how the company performed in the stock market. There were a substantial number of uncertainties surrounding Tesla, a large part of which was due to CEO Elon Musk's decisions and statements.

In January, the shares of the electric-vehicle maker peaked impressively. However, as the year progressed, Tesla's stock price experienced significant volatility, leading it to be one of the worst performers in 2021 according to various economic analysts. Volatility isn't new for Tesla, but it was pronounced this year.

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A lot of the fluctuation in the market price of Tesla's stock can be attributed to Musk himself. Famous for creating waves in the market through his tweets or on-the-spot decisions, the maverick billionaire's influence on Tesla's stock price cannot be overstated.

Tesla

For instance, in May, he hosted a Saturday Night Live episode. The anticipation of this appearance led to a rise in Tesla's shares, only to fall after his performance, demonstrating the Musk-effect on the company's valuation.

The cryptocurrency market also played a surprising role in Tesla's stock performance. Tesla and Musk's involvement in the cryptocurrency market, especially Bitcoin, grabbed headlines throughout the year.

Tesla’s decision to purchase $1.5 billion worth of Bitcoin in February was met with a bullish response from investors. This led to an initial surge in value but also led to uncertainty, chiefly because of the volatile nature of cryptocurrencies.

Even more notably, Musk's announcement in May that Tesla would stop accepting Bitcoin as payment for vehicles over environmental concerns sent shockwaves through the cryptocurrency market, which in turn affected Tesla’s own stock price.

The unpredictability brought about by these decisions unsettled many investors. It's evident that Musk’s influence over Tesla, combined with his unpredictable manner, contributed to the stock’s volatility in 2021.

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It's also worth looking at the regulatory and legal challenges the automaker faced. Tesla and Musk had quite a few run-ins with authorities in different nations last year.

In China, the company faced issues related to public complaints about quality control and perceived insensitivity to these complaints. Consumer trust in the company declined leading to a dip in sales and stock prices.

Concurrently, Musk's tweet about the possibility of Tesla becoming the biggest company soon attracted the attention of the Securities and Exchange Commission (SEC), triggering further jitters among investors.

And then there was the antitrust probe by the Federal Trade Commission against Musk for his tweet 'favoring' his companies. These regulatory issues, combined with Musk's controversial tweets, were major contributing factors to Tesla's stock volatility.

After examining the cryptocurrency involvement, Musk's actions, and regulatory challenges, another significant aspect to consider is Tesla's competition. Tesla was no longer the only player in town by 2021.

The electric-vehicle sector saw significant growth in competition last year. Traditional automakers like General Motors and Ford began investing heavily in EVs, while startups such as Rivian earned tremendous market attention.

The increased competition was bound to influence investor perspectives on Tesla, contributing to the fall in its stock. As more and more companies join the electric-vehicle fray, Tesla might continue to feel the heat.

It was a year of substantial competition for Tesla, and the constant underperformance of its stock reflected the situation well.

However, despite all the difficulties, there are still reasons to be bullish about Tesla's future. Its position in China is strengthening again, and its Gigafactory in Berlin is nearing completion.

These developments present a significant growth opportunity for Tesla to extend its global reach and maintain its position as the leader in electric vehicles. Furthermore, the continued growth of EV sales will likely benefit Tesla in the long run.

Thus, while 2021 was a year of volatility for Tesla's stocks, the future remains bright. The year was a challenging one, but Tesla has weathered hardships before and emerged stronger.

The dynamic nature of the tech industry, combined with Musk's unpredictable behavior, may have had a significant negative impact on the stock performance of Tesla in 2021. But the long-term picture may be brighter than last year's stock prices suggest.

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