Today’s Tesla Stock Situation

Today, Tesla showed noticeable volatility, falling 4.68% over the week.
It has fallen -1.62% over the month and approximately 6% over the past six months.
Currently, it needs to rise about 44.62% to break through its previous high of $488 again.
The overall stock market is also showing a downward trend, mostly recording in red due to economic instability.

Tesla Recall Issues and Impact

Approximately 375,000 or more Tesla vehicles (Model 3 and Model Y) in the United States have been included in the recall.
The cause of the recall is a defect in the electric power-assisted steering system, which may cause problems with the steering assist function while driving.
According to the U.S. National Highway Traffic Safety Administration records, a power-assisted steering failure may occur if stress is applied to the printed circuit board.
However, no actual collisions, injuries, or deaths have been reported, and this issue is analyzed as resolvable through OTA software updates.
Tesla, including Elon Musk, is emphasizing that this recall is a simple software issue, and is stating that concerns about unnecessary costs and declining credibility are exaggerated.

Tesla Controversy Related to the Japanese Government and Nissan

According to a Financial Times report, the Japanese government reportedly requested Tesla to acquire or make a strategic investment in Nissan.
Nissan, once famous for its sports car technology, has recently been experiencing difficulties due to management difficulties and merger pursuits.
Merger discussions between several companies in Japan, including Honda and Mitsubishi Nissan, ultimately fell through, leaving Nissan to contemplate its own destiny.
In this process, news also broke that former Tesla director Hiro Mizuno and the Japanese government attempted to contact Tesla, but Mizuno strongly denied the related facts.
Elon Musk argued that Nissan factory acquisition would not help Tesla because Tesla’s factory is introducing a unique production process (unboxed process), claiming that the Financial Times report was fake news.

Tesla’s Future Strategy and Factory Operation Plan

In the past, through the acquisition of the Fremont factory, Tesla succeeded in securing large-scale production facilities and attracting investment.
Currently, Tesla has announced plans to introduce an unboxed process, which is different from the existing conveyor belt assembly method.
This new process can reduce production area by up to 40%, which is considered a strategic advantage to maximize Tesla’s cost efficiency.
This innovative production method suggests that Tesla is focusing on strengthening its own competitiveness instead of external acquisitions such as Nissan acquisition.

< Summary >
Tesla’s stock price has fallen sharply in the short term, and a considerable increase is needed to recover to its previous high.
The recall issue of more than 375,000 Tesla vehicles in the United States is related to a defect in the electric power steering parts, but there are no actual accident cases.
Amid the controversy surrounding the Japanese government and Nissan, Tesla strongly denies allegations of Nissan acquisition, and plans to increase production competitiveness with its own innovation strategy (unboxed process) in the future.

[More…]
Tesla: https://nextgeninsight.net/?s=%ED%85%8C%EC%8A%AC%EB%9D%BC
Nissan: https://nextgeninsight.net/?s=%EB%8B%9B%EC%82%B0

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Ⅰ. Discussion on Whether the Stock Market Should Decline

The question of whether a decline is truly necessary is the result of multiple factors overlapping in the short term.
Currently, the stock market is in a short-term adjustment phase, which can be interpreted as a result of high valuations after excessive gains.
There is an opinion that after experiencing momentary instability akin to seasickness, one should seek an opportunity to regain momentum through external activities and a change of pace.

Ⅱ. Trends in the Korean Stock Market and Shipbuilding Stocks
In the Korean stock market, shipbuilding-related stocks have recently shown a sharp decline.
HD Hyundai Heavy Industries saw a 10% decrease on a weekly basis, and Hana Options experienced a rapid adjustment with a 7% decrease.
The report conveys the message “Now is the time to sell,” analyzing that valuations have become excessively high.
This adjustment is a short-term price correction process, and it is also possible to interpret it as an anticipation of a renewed upward trend in the future.

Ⅲ. Resumption of Short Selling and Its Impact

The resumption of short selling from March will be a major factor affecting the stock market.
The resumption of short selling can be seen as a process of adjusting overheated stocks to their fair value due to upward trends.
Overseas investors are managing risk through short selling, and some global funds are operating investment strategies that include short selling.
Among stocks that have risen excessively, those with weak fundamentals are likely to be targeted for short selling, and thereafter, trading activity is expected to be revitalized through short covering phenomena, etc.

Ⅳ. Major Overseas Stocks and US Market Trends

In the US market, Palantir shares fell 10%, influenced by reduced defense spending and insider selling.
Palantir underwent adjustments due to concerns about overheating after a sharp rise, but the excellent performance in the past quarter implies the possibility of future recovery.
After Walmart’s earnings announcement, concerns about financial stock adjustments and a slowdown in consumption simultaneously emerged due to lower-than-expected guidance.
The US stock market is still experiencing partial adjustments while maintaining strong upward momentum, such as recording all-time highs.

Ⅴ. Movements in China and Other Global Markets

The Chinese market is shifting to a positive atmosphere following the government’s proactive financial policies and the aftermath of “Deepfake” related news.
Rising stock prices of major companies such as Alibaba and the inflow of foreign capital are being observed.
However, it is burdensome to excessively increase the proportion of Chinese stocks, requiring a diversified investment strategy.

Ⅵ. Upcoming Market Schedule and Interest Rate Outlook

Next week, attention will be focused on whether interest rates will be lowered in Korea.
Given that the weakening exchange rate and dollar strength compared to last December have been maintained, the impact on the dollar from an interest rate cut is expected to be limited.
In the US, Nvidia’s earnings announcement is scheduled, and stock price volatility is expected depending on the earnings and guidance.
If Nvidia’s earnings are announced and conservative guidance is provided, there is a possibility that the stock price will remain in a stable adjustment phase rather than further upside potential.

Ⅶ. Comprehensive Investment Strategy and Conclusion

In a situation of short-term adjustments after excessive gains, a strategy of re-entering at the appropriate time is effective rather than unconditionally selling.
One should closely monitor the resumption of short selling and global economic indicators, and pay attention to the supply and demand trends of foreign and institutional investors.
It is necessary to make investment decisions by comprehensively considering the volatility of major overseas markets such as the US and China, as well as domestic and international economic indicators and interest rate decisions.
Since short-term adjustments are likely to be temporary, it is advisable to approach them with a strategy of re-engaging in the upward trend when opportunities arise.

< Summary >
The stock market has entered a period of adjustment in the short term due to the overlapping of several factors, but this is a temporary process.
Overheated stocks, such as domestic shipbuilding stocks, underwent adjustments based on reports, but opportunities for re-entry exist.
Considering the resumption of short selling from March, the strategies of overseas investors, and the positive trends in the US and Chinese markets,
there is a possibility of another rise after short-term adjustments, and risk management and supply and demand trends should be carefully examined when investing.

[More…]
Short Selling → https://nextgeninsight.net/?s=%EA%B3%B5%EB%A7%A4%EB%8F%84
Nvidia → https://nextgeninsight.net/?s=%EC%97%94%EB%B9%84%EB%94%94%EC%95%84

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