Why Tesla Stock was criticized on Friday

What happened

Shares of You’re here (TSLA -6.42%) fell on Friday, falling as low as 10.8% at one point in the trading day. At market close, the stock was down 6.4%.

The continued beatings in the electric car maker’s stock were in part primarily due to a tough day in the market for many stocks, especially growth stocks like Tesla. But the ongoing drama in the news surrounding Tesla CEO Elon Musk is having a negative impact on the stock. Musk’s attempted acquisition of Twitter (TWTR 2.68%) is still uncertain. Additionally, an insider report released Thursday that contained accusations against Musk likely added downward pressure on the stock.

So what

While Tesla’s business has done well this year, its stock has not. Year-to-date, the stock is down 37% – much worse than the S&P500down 18% over the same period. The stock’s downtrend was largely tied to investor jitters about popular growth stocks. With a price-to-earnings ratio of around 90 and rapidly growing revenue, Tesla fits nicely into the growth stock category.

Of course, it’s not just growth stocks that have had a tough 2022. But they have generally been hit harder than the broader market. And that was largely true on Friday as well, helping to explain Tesla’s outsized stock decline relative to the tech-heavy one. Nasdaq The 0.3% decline in the composite.

Investors may also be concerned about the time and energy Musk appears to be pouring into his bid to buy social network Twitter. This could hurt his devotion to Tesla.

Image source: Getty Images.

Now what

During Tesla’s first-quarter earnings call in April, the company said it still plans to increase vehicle production by 50% or more in 2022 despite global supply constraints.

With potential growth like this on the horizon, Tesla shares are actually starting to look quite attractive at this level. For investors who have been on the sidelines and have been waiting for a good buying opportunity, now may be the time to take a closer look at the stock to see if it is as attractive as it appears on the surface. .

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