Tesla stock snaps 7-day losing streak

Tesla (TSLA) shares finished higher today, snapping a brutal 7-day losing streak for the stock.

It’s a brief respite for investors however, with the stock down over 17% in the past 5 days, 42% in the past month, and a whopping 68% for the year.

Some traders and market technicians are eying the $100 level as support for the stock, something which was unthinkable only a couple months back.

But the latest news out of China has the automaker reportedly extending its holiday break, as COVID cases rise in the region following the government’s relaxation of zero-COVID policies. The automaker will also have a longer Chinese New Year break for employees than it normally does in January, though Tesla China has said it was giving workers additional time to travel home for the holiday.

But of course it isn’t just the news out of China, that are weighing on the stock. It is the recent activities of CEO Elon Musk.

Musk’s time spent at Twitter running his newest company as CEO has sent investors and Wall Street analysts howling, as they implore Musk to return to Tesla. One analyst went so far as to say Musk is “asleep at the wheel” during a pivotal time for the company.

Musk’s large Tesla stock sales aren’t helping the matter, which many believe are being used to fund his Twitter purchase. Less than two weeks ago Musk disclosed that he sold 22 million shares of Tesla stock, with a value of $3.6 billion.

The total amount of stock Musk has sold since April, when he announced his bid to buy Twitter, stood at $23 billion — and for the year Musk has unloaded $40 billion of stock.

LUSAIL CITY, QATAR - DECEMBER 18: Jared Kushner and Elon Musk look on during the FIFA World Cup Qatar 2022 Final match between Argentina and France at Lusail Stadium on December 18, 2022 in Lusail City, Qatar. (Photo by Dan Mullan/Getty Images)

LUSAIL CITY, QATAR – DECEMBER 18: Jared Kushner and Elon Musk look on during the FIFA World Cup Qatar 2022 Final match between Argentina and France at Lusail Stadium on December 18, 2022 in Lusail City, Qatar. (Photo by Dan Mullan/Getty Images)

The cumulative effect of these sales has weighed heavily on Tesla stock, one that counts a relatively high percent of individual shareholders as opposed to institutional ownership, and one that is one of the most heavily shorted stocks in the market. The lack of heavy institutional support and a high level of short interest is a recipe for disaster for Tesla bulls.

Nonetheless there are some potential positive catalysts for the stock. Shortly after the New Year holiday investors will be eying Tesla’s Q4 delivery report. The Street is looking for 422K deliveries globally, according to Bloomberg estimates.

In addition, Tesla is still ramping up production at Giga Austin and Giga Berlin, both of which hit new milestones for production. Analysts like Colin Rusch at Oppenheimer believe that Tesla is still driving down costs for EV manufacturing in the long term, and other manufacturers will struggle to match its efficiency in the future.

Speaking of the not too distant future, starting on January 1, Tesla will be once again eligible for federal tax credits for purchases of certain EVs, thanks to the Inflation Reduction Act. With the Treasury Department delaying new rules for battery materials requirements and sourcing, cheaper Tesla EVs like the Model 3 and Model Y will be eligible for the full $7,500 tax credit, depending on the buyer’s income level.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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