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MARKET REPORT: Tesla Price Cuts Send Automaker into a Spin: Shares Drop As Much as 6% During Early Wall Street Trading
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Tesla shares fell lower after it slashed the price of its models globally by as much as 20 percent.
In an effort to boost sales and pressure rivals, the electric car maker lowered the prices of its Model 3 and Model Y cars in the US and across Europe.
The impact is being felt strongly in the UK, with discounts of up to £9,000 on some Tesla models.
Price cut: Tesla shares fell lower after it slashed the price of its models globally by as much as 20 percent
Tesla shares, which lost about two-thirds of their value in 2022 in the stock market’s worst year ever, fell as much as 6 percent during early Wall Street trading.
Dan Ives, an analyst at Wedbush Securities, said Tesla’s price cuts come amid a brutal “arms race” between electric car makers.
But he also warned that Tesla is grappling with increasing consumer pressure as the global economy slows and demand is “starting to show some cracks.”
The Tesla share price fall has been costly to boss Elon Musk, who has seen the value of his stake plummet from 13.4 percent.
His stake was estimated at around £42 billion last night. Those shares would have been worth £142 billion just over a year ago.
Back in London, the FTSE 100 rose 0.64 percent, or 50.03 points, to 7844.07 as it approached an all-time high. The FTSE 250 gained 0.56 percent, or 111.71 points, to 19952.84.
Taylor Wimpey said it was considering job cuts and would buy less land and build fewer homes this year as the housing market slows. The homebuilder – whose shares rose 1.9 per cent, or 2.1 pence, to 114.75 pence – outlined plans to save £20m a year as the industry reels from the impact of rising mortgage rates and economic uncertainty on demand.
Rivals Persimmon (0.8 percent or 11.5 pence to 1416 pence) and Barratt Developments (0.8 percent or 3.8 pence to 455 pence) also sounded the alarm about a post-pandemic housing slowdown. Taylor Wimpey built 14,154 homes in 2022, slightly down from the 14,302 completed in 2021, and the cancellation rate for the year was 18 percent, up from 14 percent a year earlier.
But despite the turmoil caused by rising mortgage rates following September’s disastrous mini-budget, Taylor Wimpey’s 2022 earnings would likely have met market expectations of around £921m.
Smaller rival MJ Gleeson also said it sold fewer homes last year, down 4 percent to 894 in the six months to the end of December.
It signaled declining cancellation rates in the six weeks leading up to Christmas and said it was “cautiously optimistic” about a recovery in the housing market this year as mortgage rates fall and customers move from other developers to buy some of its more affordable properties.
Shares rose 8.2 percent, or 31 pence, to 411 pence. At Redrow, the mid-cap homebuilder completed its £100m share buyback programme. Shares fell 0.3 percent, or 1.5 pence, to 522.5 pence.
Shares in bookmaker owner William Hill, 888, fell 4.6 percent, or 4.25 pence, to 89.25 pence after it reported a 3 percent drop in annual revenue despite a boost from the World Cup. The drop was driven by a 15 per cent drop in online revenue by 2022 to £1.33 billion.
Investors in Capricorn Energy will decide on February 1 with two crucial votes on the future of the oil and gas company.
In a giant day, shareholders will vote on whether to support Capricorn’s proposed merger with Israeli gas company Newmed and efforts by third-largest investor Palliser Capital to overhaul its governance. Shares fell 0.8 percent, or 2 pence, to 242.8 pence.
Meanwhile, C&C, the Dublin-based drinks company, warned that earnings for the year would be lower than hoped given falling consumer spending and the impact of ongoing rail strikes.
The FTSE250 company behind Bulmers, Magners and Tennent’s plummeted 9 percent, or 16.6 pence, to 167.2 pence.