- Retail investors are starting to cut back on their purchases of Tesla stock as it undergoes a historic plunge.
- In a weekly update published Thursday, the company said it was “seeing the first signs of retail exhaustion at TSLA.”
- Investors piled on stocks in 2022 as prices continued to fall.
Retail investors are starting to cut back on purchases of Tesla shares. Prices have suffered a sustained sell-off that led to their worst annual performance in history in 2022, and show few signs of weakening in the new year.
In a weekly update published Thursday, Vanda Research said, “TSLA is seeing the first signs of retail exhaustion.
Retail flows closed at $37.8 million on Wednesday, but were “significantly weakened” even as the EV maker’s shares surged 5.1% after taking a breather from recent losses.
“The modest buying shows that a good chunk of retail traders have taken advantage of yesterday’s rally to let go of their TLSA positions,” wrote Marco Iacini, senior vice president of research at Banda. . The company’s VandaTrack tool monitors the activity of individual investors in his more than 9,000 stocks in the US and his ETFs.
“To put the picture in perspective, retail investors have bought more Tesla stock in the last six months ($13 billion) than they have in the last 60 months combined. $113/sh,” he said. .
Tesla shares fell 3% in Thursday’s session to $110.10 a share. The price is lower than the $123.18 that closed in 2022. Stocks fell 65% in 2022, the worst annual loss ever, wiping out more than $700 billion in market value.
While Tesla’s stock was under pressure last year, retail investors piled into the stock. Cumulative net retail purchases increased by more than 420% to take him to $15.41 billion, according to a Vanda study, making him the most purchased single stock by retail investors in 2022, surpassing Apple. .
Some investors and analysts said Tesla CEO Elon Musk’s new acquisition of Twitter and his focus on selling his multibillion-dollar Tesla stake sent the automaker’s share price down. said.
Musk refuted those allegations, accusing the Fed’s aggressive rate hike pace of hurting Tesla’s valuation. Tesla’s market cap is around $349 billion, well below his early 2022 valuation of $1.2 trillion.