Hi all! I did an analysis of Tesla’s stock returns since Trump’s inauguration. There has been a lot of smoke about its decline, but I wanted to do a more rigorous analysis that compared it to the market and peers.
So hard to predict because it’s such a meme stock. Gotta think Musk going full right wing gives some bump because of the current administration, but it is being overwhelmed by the deterioration of the brand value as former customers who were environmentally minded and thus likely left wing now see the car brand as a right wing political statement.
Also the brand is so tied to Musks involvement, can’t be good that he is so publicly focusing on something else for most of his time.
KissmySPAC on
The big 7 would be a great comparison because they ran together. Peers doesn’t mean much because they are mostly zombies.
ChangingHats on
Made by subtracting actual from predicted? How good are your predictions normally and at extremes?
Abnormal as compared to what time period? If your max lookback is Nov 2024…
ludflu on
turns out it matters what your customers think
eurochic-throw12 on
For the Tesla evaluation to continue, it was well above its peers, Tesla had to maintain sales and positive cash flow. If you assume that the stock was pricing in future growth based on self driving taxis, robotics and R&D, then it had to keep positive cash flow to realize the R&D. With sales slump, that future growth becomes an uncertainty and the stock would have to pull back to price in the uncertainty.
If they shore up their finances and can demonstrate positive cash flow their stock could go up again. The problem is their factories are fixed costs and the drop of sales in the EU will be a drag on their cash flow. In addition, the Tesla AI investment is also cash intensive, buying and running GPUs is an expensive endeavor.
I have not looked at their balance sheets, and this is based on the news articles about Tesla. I don’t own or plan to own any Tesla stock.
FuckedUpYearsAgo on
Expand the period to 6m. Notice the rise at election and the fall back to normal levels of today.
![[OC] Tesla's statistically significant post-inauguration slump](https://www.byteseu.com/wp-content/uploads/2025/03/m6wuirw2d9oe1-1024x819.png "[OC] Tesla’s statistically significant post-inauguration slump")
7 Comments
Hi all! I did an analysis of Tesla’s stock returns since Trump’s inauguration. There has been a lot of smoke about its decline, but I wanted to do a more rigorous analysis that compared it to the market and peers.
I leveraged a methodology called an Event Study to do so, and found that the post-inauguration stock slump is statistically significant at the 0.01 level. [Click here to read more](https://www.statswithsasa.com/2025/03/12/teslas-statistically-significant-post-inauguration-slump/) about my methodology and the analysis!
Source: Nasdaq
Tools: R, ggplot
So hard to predict because it’s such a meme stock. Gotta think Musk going full right wing gives some bump because of the current administration, but it is being overwhelmed by the deterioration of the brand value as former customers who were environmentally minded and thus likely left wing now see the car brand as a right wing political statement.
Also the brand is so tied to Musks involvement, can’t be good that he is so publicly focusing on something else for most of his time.
The big 7 would be a great comparison because they ran together. Peers doesn’t mean much because they are mostly zombies.
Made by subtracting actual from predicted? How good are your predictions normally and at extremes?
Abnormal as compared to what time period? If your max lookback is Nov 2024…
turns out it matters what your customers think
For the Tesla evaluation to continue, it was well above its peers, Tesla had to maintain sales and positive cash flow. If you assume that the stock was pricing in future growth based on self driving taxis, robotics and R&D, then it had to keep positive cash flow to realize the R&D. With sales slump, that future growth becomes an uncertainty and the stock would have to pull back to price in the uncertainty.
If they shore up their finances and can demonstrate positive cash flow their stock could go up again. The problem is their factories are fixed costs and the drop of sales in the EU will be a drag on their cash flow. In addition, the Tesla AI investment is also cash intensive, buying and running GPUs is an expensive endeavor.
I have not looked at their balance sheets, and this is based on the news articles about Tesla. I don’t own or plan to own any Tesla stock.
Expand the period to 6m. Notice the rise at election and the fall back to normal levels of today.