In the week that ended on January 18, the stock of popular electric carmaker Tesla (TSLA) fell 13.0%, its worst weekly loss in the last 22 weeks.
The fall was primarily the result of a sharp sell-off in the company’s stock on January 18, when it fell 13.0% during the session. Before the market opened on the day, Tesla’s CEO, Elon Musk, made some announcements that triggered the sell-off. Let’s take a closer look.
Musk’s blog post
Before the market opened on January 18, Musk published a post on Tesla’s official blog revealing the content of his email to Tesla employees. In his email, he informed employees that Tesla had decided to lay off nearly 7% of its full-time workforce, as it was left with no choice due to the variety of challenges it has been facing lately.
In his post, Musk talked about the challenges Tesla faced last year and also acknowledged the intense competition from other automakers. He also stressed the need for Tesla “to reach more customers who can afford our vehicles” and the need to “work much harder than other manufacturers to survive.”
The announcement of a 7% cut in Tesla’s full-time workforce and Musk’s acknowledgment of the rising challenges for the company hurt investors’ sentiments on January 18 and triggered the sell-off.
As of January 18, Tesla was down 9.2% so far in January. Meanwhile, other auto companies General Motors (GM), Ford Motor Company (F), Fiat Chrysler Automobiles (FCAU), NIO (NIO), Toyota Motor (TM), Honda Motor Company (HMC), and Ferrari (RACE) were up 15.4%, 12.2%, 16.0%, 5.3%, 8.0%, 12.5%, and 13.9%, respectively, in January.