Tesla (NASDAQ:TSLA) is in free fall, and short sellers are cashing in big. The stock has been cut in half over the past three months, handing hedge funds a $16 billion windfall as the company’s market cap nosedived by over $700 billion. Elon Musk’s net worth? Down more than $100 billion. Investors are spookednot just by Tesla’s weakening fundamentals but by Musk’s growing entanglement in politics. His public support for far-right parties in Europe and aggressive government spending cuts in the U.S. have sparked consumer backlash, hitting Tesla’s brand hard.
The outrage isn’t just on Wall Streetit’s spilling onto the streets. Protesters have been swarming Tesla dealerships across the U.S., angry over Musk’s influence in the Trump administration and what they see as his unchecked power. While some demonstrations have remained peaceful, others have escalated into vandalism. Despite threats from government officials warning of crackdowns, the movement isn’t slowing down. Meanwhile, Tesla’s global sales are crateringdown 72% in Australia and 76% in Germany year-over-yearadding fuel to the fire.
With the stock in freefall, analysts are scrambling to reassess Tesla’s future. JPMorgan just slashed its price target to $120, calling the brand’s decline “unprecedented.” Hedge funds are dividedsome are doubling down, while others are running for the exits. One thing is clear: Tesla is no longer the untouchable EV juggernaut it once was. Investors are now left to decidedoes the stock have another rally in it, or is this the beginning of a long, painful reckoning?
This article first appeared on GuruFocus.
