Tesla shares experience second-lowest monthly performance as concerns rise among Elon Musk’s investors.

Tesla’s stock had a slight gain of 4% today, but that’s not enough to erase the fact that the company experienced its worst month ever recently. With the end of the post-election rally, Tesla’s market value has fallen below $1 trillion, marking a tough time for the electric vehicle manufacturer.

In February, the stock saw a significant drop of 28%. This decline was driven by worries about weak consumer spending in the U.S., along with uncertainties surrounding tariffs and policy changes, making investors more nervous. The drop in Tesla’s shares in February was particularly severe compared to its previous worst month in December 2022, when the stock fell by 37%.

According to Steve Sosnick, who is the chief strategist at Interactive Brokers, it is challenging to find a floor or a stable point for a stock that is highly valued like Tesla. He mentioned that Tesla has long defied traditional valuation methods, so deciding where the stock might stabilize is more about how investors feel rather than typical financial metrics.

This week alone, the stock fell 13% after a report from the European Automobile Manufacturers’ Association revealed that Tesla’s sales in the European Union dropped 45% in January, despite a growing market for electric vehicles. Additionally, the financial performance of the company last month did not meet expectations.

Some analysts believe that Elon Musk’s political involvement might be turning some potential buyers away. For instance, Musk played a significant role in President Donald Trump’s Department of Government Efficiency and has recently backed the far-right Alternative for Germany party. He also took part in an online effort to persuade officials in the UK to release far-right activist Tommy Robinson from custody.

Despite these challenges, there still seems to be some support for Tesla’s stock, though it is difficult to pinpoint exactly where that support lies. Bob Lang, the founder of Explosive Options, suggested that there is indeed a certain level of loyalty from investors who have made money thanks to Musk. He noted that this dedicated following means many will likely hold onto their shares for the long term.

In summary, while Tesla’s recent stock performance raises many concerns, particularly due to significant drops in the past month and challenges in sales, there remains a group of investors that stand by the company’s leadership and future prospects. Their loyalty could provide some level of stability amidst the current uncertainties.