Tesla shares trade at record low over Musk's distraction with Twitter  

Electric car maker's stock has slumped more than 50% this year after CEO's purchase of the Twitter social media platform

Tesla is now trading at 30 times projected earnings, its lowest ever, amid risks attributed Elon Musk's foray into social media, and to falling demand in China, the world’s largest car market. File picture

Tesla shares are trading at their cheapest-ever level, as the electric-car maker’s stock slumps more than 50% this year.

Chief executive Elon Musk’s focus on his recent acquisition of Twitter is among a few headwinds the stock faces, with some bears saying that the world’s most valuable car maker should see more declines.

Tesla is now trading at 30 times projected earnings, its lowest ever, and well above the benchmark S&P 500 Index’s 17 times forecast earnings. 

Meanwhile, the company is grappling with a broad array of challenges, including the risks from its billionaire CEO’s association with Twitter to falling demand in China, the world’s largest car market.

“My biggest concern is the slowdown they’re seeing in China,” Matt Maley, chief market strategist at Miller Tabak said, adding that “as long as Elon Musk is spending a lot of time with Twitter, it’s going to keep a lid on the stock”. 

Bloomberg News reported last week that Tesla plans to suspend output in stages at its Shanghai electric car factory from the end of the month until as long as early January, amid production line upgrades and slowing consumer demand.

Meanwhile, Twitter is more than a distraction. Mr Musk’s bankers are considering replacing some of the high-interest debt he layered on Twitter with new margin loans backed by Tesla. 

The reopening in China might help investor sentiment, said Mr Maley, although sales there remain a concern. 

“Between the issues with Twitter and the slowdown in demand, Tesla could fall as low as $150 (€141) before it becomes attractive to most investors,” he said.

Tesla shares were at one stage in the latest session by 3.5% at about $173, rising along with fellow technology and electric car companies, as China removes more 'Covid zero' restrictions and favourable US data. 

• Bloomberg