Tesla faced a crisis as CEO Elon Musk's risks added to issues like the Cybertruck recall and accounting fraud allegations. The company's stock price has halved in three months, increasing the number of investors who have entered a loss zone.
According to the financial investment industry on the 24th, Tesla stock closed at $236.26 on the New York Stock Exchange overnight, rising 0.18% ($0.4) from the previous day. However, in the subsequent after-market, it continued a sluggish trend, dropping 0.53% ($1.26).
Tesla's stock price has been on a downward path since peaking at $488.5399 during trading on December 18 last year. The primary reason is the so-called "Musk risk." After Musk became head of the U.S. Department of Government Efficiency (DOGE) and engaged in political activities, extreme behaviors, from boycotts to setting Tesla cars on fire, have emerged.
Tesla's Cybertruck recall involves over 46,000 units due to exterior panels that can separate while driving. This marks the eighth recall since the Cybertruck's launch. Additionally, the Chinese electric vehicle corporation BYD unveiled a charging system that outperforms Tesla's Supercharger system, further exacerbating the situation.
The Financial Times (FT) has raised allegations of accounting fraud at Tesla. When comparing the capital expenditure executed in the second half of 2024 with the value of assets where that money has been spent, the core issue is that there is a shortfall of $1.4 billion (approximately 2 trillion won). The Financial Times warned that this discrepancy is difficult to explain by exchange rate fluctuations and may indicate weakening internal controls.
Most retail investors who invested in Tesla, known as "Seohak-gaemi" (individual investors in U.S. stocks), are reporting losses. The average loss rate for 309,145 Tesla stock investors linked to the Naver Pay "My Assets Service" has surpassed 10%. The proportion of loss-making investors is also nearing 60%. Among the 44,899 investors in the exchange-traded fund (ETF) TSLL (which tracks double the daily increase in Tesla's stock price), the average loss rate is 54%, and about 8 out of 10 are in a state of loss.
Retail investors continued to invest in Tesla despite the stock price's downward trajectory. According to Korea Securities Depository, domestic investors purchased a net $985.16 million (approximately 1.4 trillion won) in Tesla and $773.65 million (approximately 1.1 trillion won) in TSLL over the past month, ranking first and second in net foreign stock purchases. This suggests that if Tesla's stock price does not rebound, the number of loss investors may increase.
Investors in equity-linked securities (ELS) tied to Tesla are also likely to be increasingly concerned. Recently, more than 600 billion won worth of ELS linked to Tesla has been issued, making it the largest in the category of overseas stock-based ELS.
ELS is a product that allows investors to receive a predetermined revenue if the underlying stock or stock index meets certain criteria by maturity. Typically, ELS has a maturity of three years, although some have a maturity of less than one year. Investors in short-maturity Tesla-based ELS face a relatively higher possibility of loss.
Mirae Asset Securities recently announced a public offering of ELS 35875, 35876, and 35877, which are representative examples of "downside barrier touches." These ELS are based on Tesla and NVIDIA stocks. As Tesla's stock price plummeted, it touched the downside barrier, indicating a potential for loss.
All three ELS were issued on February 20 and have a maturity of three months, due on May 16. The initial benchmark price for Tesla's stock was $383.68. If Tesla's stock price does not exceed 70% (or $268.576) of the initial benchmark price until maturity, the principal will be lost. Currently, it must rise by about 14% to exceed this level.
The ELS from Shinyoung Securities, which have maturities between May 30 and June 13, may also pose the risk of principal loss. In particular, the initial benchmark price for the Plan Up 12226 ELS is $436.23. If this stock price does not recover by the repayment evaluation date on June 4, a principal loss will occur. If it remains at the current level, losses of nearly 20% will be suffered.