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Tesla Stock Reacts to Elon Musk’s Latest ‘Joint’ Venture

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Dec. 4 2020, Updated 10:52 a.m. ET

Tesla stock’s volatility

This year has been one of Tesla’s (TSLA) most volatile. While its stock fell 13.1% in July despite the company exceeding its second-quarter Model 3 weekly production, it ended August in positive territory after a rollercoaster ride, at 1.2%. Today, TSLA posted a five-month low of $252.39, before recovering to $266 by 11:30 AM Eastern Time—still down 5.3% from yesterday. In comparison, auto (XLY) peers General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) have fallen 1.1%, 0.3%, and 0.8%, respectively. Let’s look at what could have driven down Tesla stock today.

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The Musk factor

Recently, we’ve discussed how Tesla stock may be being driven more by CEO Elon Musk than its fundamentals. Reuters reported today that Musk was “smoking marijuana on a live web show with comedian Joe Rogan.” Despite stating that he’s “not a regular smoker of weed” and he doesn’t “find that it is very good for productivity,” Musk may have surprised many of his followers and loyal Tesla investors. In a candid interview with The New York Times on August 16, Musk said that “this past year has been the most difficult and painful” of his career.

Executive departure

In its SEC filing today, Tesla revealed that its chief accounting officer, Dave Morton, resigned on September 4. Morton had just recently joined Tesla, on August 6.

The first half of this year was tough for Tesla as it faced sharp criticism from experts due to delays in its Model 3 production ramp-up. The company eventually proved many critics wrong by releasing strong second-quarter vehicle delivery and production data in the first week of July.

Undoubtedly, Musk has a large fan following, and he knows how to keep TSLA stock volatile. However, investors may want to stay focused on the company’s Model 3 production ramp-up and profitability.

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