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 to say this has been a crazy year for Tesla would be in drastic understatement with an astonishing 69 price dropped since the start of the year the automaker and its CEO have made this a very painful year for stockholders you're watching trade daily like And subscribe for more daily Tesla stock market news in today's video I'll be breaking down the crazy year ahead for Tesla and be giving my own personal opinion on how someone should prepare for this Tesla is heading into make or break 2023

with pandemic shine waning the stock is heading into a reckoning in 2023 and not because of Elon musk's involvement with Twitter it's the coming Global recession and increasing competition in the market for electric vehicles that will challenge its position in a worst case scenario Tesla shares could see all of their pandemic gains vanish it's a good thing for Tesla at least that Elon Musk got the go-ahead from a recent Twitter poll to step down his CEOs he is going to need to concentrate

all his energy on his electric vehicle maker this is an important year for the U.S automaker as it contends both with a potential recession and with a slew of competition in the market for electric vehicles like other pandemic Darlings the appeal for the stock has waned now that the era of easy money has ended it was a bit surprising for most of us as it happened but the pandemic turned out to be the opposite of a death knell for high-flying asset prices after an initial Swoon in March 2020 as economies

shut down stock markets went from strength to strength aided by fiscal and monetary largesse and while the overall Market gained it was why called The Field of Dreams companies that rallied the most those are the firms who most embody technological promise in our new post-pandemic lives thank Peloton for those who couldn't use gyms or Zoom for knowledge workers trapped at home or even Robin Hood for the band of day Traders benefiting from it all most of these companies have given back all of their hard-won pandemic gains as

our work and home lives have normalized and interest rates along with them take Peloton for example the loss making exercise bike makers zoomed higher almost immediately after the fed's March 2020 intervention reaching an all-time high five times the pre-pandemic February 2020 Peak Peloton quickly emerged as a pandemic winner by May 2020 shares were already a new high Zoom had the same parabolic rise as Peloton though not quite quintupling at its early 2021 High but like palatin shares today are

languishing far below February 2020 levels they too have given back all the pandemic gains Zoom quadrupled during the pandemic shares hardly missed a beat in March 2020. Tesla is different though it's a more mature company than other pandemic Darlings it operates on a whole different scale while Zoom is trading at 41 times earnings unexpected fiscal year 2023 revenue of 4.4 billion dollars Tesla is trading at 43 times earnings on an estimated 115 billion dollars in 2023 Revenue the multiple may be similar but

both the expected Revenue growth and the scale are much larger nonetheless I would argue the Dynamics are very similar in fact if you look at the share price Tesla went higher and topped out later than the smaller pandemic Darlings trading for it most around 60 dollars a share in February 2020 Tesla peaked with the other Medicap tech stocks in November 2021 at over four hundred dollars a share that's well over six times Tesla shares ran up like a pandemic darling after 2020 it traded more like a

mega cap Tech stock so Tesla has benefited doubly in the run-up to the early 2021 post vaccine peak of high beta shares it got all of the parabolic gains other pandemic related stocks did but it is also now included in the S and P 500 its entry into the ranks of Mega cap stocks meant it has traded more like Nvidia or Facebook since early 2021. that allowed it to extend gains for another nine months and another 30 from that first Peak by the Numbers 58 of 17.5 million votes cast in favor of Elon

Musk stepping down as Twitter CEOs growth stocks are not the future of this business cycle the housing days of chasing growth stocks are over the peak was back in November 2021. here is how I put it at the time increasingly the acronym Fang doesn't describe the large cap technology stocks dominating U.S indices I have a new acronym for you phantom man that's that for Facebook AKA meta for apple and for Netflix t for Tesla are for alphabet AKA Google and for Microsoft for Amazon and N for NVIDIA over a quarter of the

weight of the S and P 500 Index is in phantom man and these eight companies comprise over half of the market waiting for the NASDAQ 100 it may feel like we're back in the 1990s given the 25.8 pte on the S and P 500 but even in the 1990s Tech never dominated the way it does today not anymore these stocks have taken an absolute beating Apple has done the best and it's had its market cap sliced by over a quarter meta has fared the worst as it was the first to crack Shares are down by about three quarters

from the high in September 2021 but Tesla is not far behind having fallen by more than two-thirds in value but let's remember that Tesla is the only large cap Tech stock that went up over six-fold from its pre-pandemic high and 10 times from its March 2020 low it has further to fall as a result the catalysts are three-fold rising interest rates a recession and competition that will in turn impact the price slash earnings multiple top-line growth and margins putting all aspects of Tesla's

valuation under pressure to date arguably the loss in Tesla shares has been mostly about the discount rate Rising with the fed's rate hikes as the pde has come down to a still aggressive 43. that's certainly superior to the 7x multiple that Ford motorco has on its shares but Tesla despite its size is thought to be in an aggressive growth phase unlike Ford a mature company even so with fed interest rates yet to Peak there is room for this multiple to contract further at the same time the fed's actions could spill over

into a generalized recession that's my base case along with most other Market Pro masticators and economists recessions are periods of both multiple contraction and top-line revenue stagnation a few weeks ago I gave you the example of discounted cash flow models I did when the internet bubble popped in that stylized example a business growing 30 percent a year less than Tesla with the expenses fixed enough that 50 percent of the revenue growth falls to the bottom line saw a 35 percent implosion in valuation from Mere

stagnation with Tesla though we have to add in the margin and growth pressure from the slew of Manufacturers coming online now with EVS there's the Hyundai ionic 5 and Kia ev6 we'll be getting updated Audi e-tron SUVs Mercedes is coming too all the while Tesla is being dogged by bad press and declining reliability scores as it scales its business the result is that Tesla is losing market share in particular because the under fifty thousand dollars electric vehicles are gaining momentum meanwhile

in China Berkshire Hathaway backed byd is launching a second EV brand putting Tesla under even more pressure in that market think of Tesla as the AOL of the EV Market a market leader in the nascent phase of the industry's growth as AOL was 20 years ago as an internet service provider but once the competition heats up does it have the metal to maintain share and margins just think about where AOL is today now after all this it'll give you my personal take on all of this comment below what you think you see I

could go on about the competitive pressures Tesla faces but let's remember that the last time Elon Musk had a trial by fire a few years back he came through brilliantly Paving the way for the company's parabolic rise when the pandemic hit so I want to focus Less on that and more on those trials and tribulations as a catalyst for how Tesla trades what has changed though is that Tesla now trades like a mega cap Tech stock it does not trade at a paltry multiple like an auto stock it doesn't trade like a

pandemic darling either since all of those company's shares have crashed irrespective of the actual health of their businesses in 2023 we'll find out whether the breakout of Tesla into metacap land is real true and permanent if so its losses may be limited because of the moats it has around its business that's not to say it can't stagnate because of strategic missteps or collapse in its Market's fortunes look at meta and Nvidia for example but that's the difference between a loss of

three quarters like Facebook and a loss of all of the pandemic gains like Robin Hood beyond meat or Uber for Tesla this distinction could determine whether it trades down to say one hundred twenty dollars a share or retraces Danes all the way down to the sixty dollars price level it stood at in February 2020. soon for example is trading 30 below its February 2020 levels despite doing well financially That's The Power of bubbles popping so Elon Musk is choosing the exact right time to refocus his talent on Tesla

that's where his own personal Fortune was made since I started writing this article shares have lost over 10 percent but if musk gets the strategy right he will maintain his wealth perhaps even expand it markets are cruel though there are very real outcomes which could see Tesla shares already cut by two-thirds down by another two-thirds before 2023 is out both outcomes are equally likely I've also read other news that would indicate a serious Bull Run for Tesla in the coming days I break down this crazy news

in this video right here thanks for watching this video and remember this is news entertainment not investment advice