Analysis

Twitter isn’t driving Tesla share price – it’s EV rivals

10th November 2022
Sheryl Miles

Data from AI news analytics pioneer, Blu Analytics, shows that negative Twitter news is not the main driver of the Tesla share price despite claims the high profile acquisition is hitting the stock market performance of the electric car maker.

Blu Analytics, which has developed artificial intelligence technology able to analyse, process and understand news in real-time to deliver actionable insights in trading and financial markets, looked at five million news articles on Tesla, Twitter and Elon Musk between January 1st and November 8th, 2022.

Tesla shares are down 49.6% year to date with concerns about the Twitter deal and the possible distraction of Elon Musk plus debt issues highlighted as a major concern. But Blu Analytics data shows Tesla’s share price is driven more by the performance of Chinese EV rivals NIO, Xpeng and Li Auto.

Blu Analytics, using data from RavenPack to measure the relevance of media coverage, narrowed the five million news articles down to around 65,000 ranking them for overall sentiment.

Just 37% of articles mentioning Twitter, Tesla and Elon Musk were positive compared with 63% which were negative, but the negativity only had a marginal effect on Tesla shares with volatility having more impact on its performance against the NASDAQ.

When sentiment on Twitter and Tesla turned clearly negative in July and August, Tesla performance improved, analysis shows.

Blu Analytics CEO Balazs Klemm said: “We can see a clear turning point on September 29th when the first major analyst downgrades came in followed by an actual earnings miss on October 4th followed by Tesla cutting its prices on cars in China.”

Between September 29th and November 9th shares in Tesla fell by 38% while LI Auto dropped 35%, NIO 47% and Xpeng fell 50%. Since September 28th Tesla has underperformed the NASDAQ by 32% pointing to the influence of Chinese competition rather than Twitter.

Blu Analytics data shows that Tesla outperformed the NASDAQ by 16% from the start of the year to April 4th when Elon Musk first revealed his stake in Twitter. It then underperformed NASDAQ by 14% until Elon Musk announced the takeover was on hold before outperforming NASDAQ by 3% until the takeover was confirmed on October 4th.

However, analysis shows from the start of the year to October 4th Tesla performance tracked the NASDAQ with both down around 29% indicating Tesla performance is driven more by volatility and market conditions.

Blu Analytics is hosting an AI innovation in asset management roundtable which will take place, online, on November 30th.

Speakers at the event, which is supported by Wilmott Magazine, include Dr Igor Halperin, AI research associate at Fidelity Investments, Professor Dr Petter Kolm of NYU Courant Institute of Mathematical Sciences, Dr Daniel Bloch, Head of Quantitative Strategies at Blu Analytics, and Dr Miquel Noquer I Alonso, Founder of the Artificial Intelligence Finance Institute.

The roundtable will be moderated by Professor Dr Rama Cont, Professor of Mathematics at the University of Oxford. Participants can register free at  Blu Analytics AI Asset Management Roundtable for the event.

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