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Tesla, Inc. TSLA’s series of price cuts has alienated investors and fans, as they fear a further hit to profitability and see the move as a sign of declining demand.
SPAC king and venture capitalist Chamath Palihapitiya The electric vehicle company’s low-cut, aggressive pricing strategy took its toll.
What happened: Sharing a screenshot of Tesla’s Model S/X price cuts since the beginning of the year, Palihapitiya said, “I was shocked when I saw this chart.”
“The speed and aggressiveness with which $TSLA is cutting prices is the way to beat End Boss,” he added. The business sees rapidly increasing affordability and continual hardware and software improvements as “super max market demand”.
“It’s a deadly combination that we haven’t seen play out in any modern market before,” he said.
Palihapitiya said some companies cut prices but most keep them constant or increase them, while some make rapid product improvements. “But really no one has given you more at a lower price on such a big-ticket purchase so many times,” he added.
See also: Everything you need to know about Tesla stock
Price cut recession? wealth manager Ram Ahluwalia Shout out and offer a different perspective. “Cutting prices is bearish,” he said. “Lower revenue, earnings and margins and lower return on invested capital,” he said.
Ahluwalia said Apple is raising the prices of its next iPhone, which is a “sign of moat, flagship position”.
He said, “Buffett quality businesses raise prices….”
Palihapitiya said the move was not a recessionary one. “While it’s certainly lower earnings per car, it’s not a downturn for overall earnings, where the focus is on earnings cadence.”
Tesla ended Friday’s session down 5.06% at $245.01, according to Benzinga Pro data.
Photo by Featureflash Photo Agency on Shutterstock
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Read next: Tesla’s aggressive price cut, Fisker’s Houdini trunk, the rise and fall of VinFast, and more: The biggest EV stories of the week
Source: www.benzinga.com
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