Musk fan who earned 2,900% sees $ 1.5 million disappear

Doug Coyle’s son told him to sell the stock.

This 68-year-old retired landscaper began investing in Tesla Inc. in 2012 after hearing about Elon Musk, which was not so famous then. Over the next decade, he invested about $100,000 in the shares, and the value of his investment skyrocketed to about $3 million at its peak in November 2021.

Then came the crash, as the pandemic-era tech bubble began to deflate. Coyle’s son, who started trading during the retail frenzy of 2020, implored him to sell. But he held on, believing in Tesla’s long-term potential. He now he has lost about $1.5 million in profit on paper.

“Everything started to fall apart” said Coyle, who lives in North Carolina.

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Investors in Tesla that remained loyal to Musk for years are facing a brutal collapse. After a decade of earnings that catapulted the company’s market value to more than $1 trillion and made Musk the world’s richest man, the stock fell 65% last year as interest rates rose. interest battering the tech sector and ending a bull run for stocks.

In a way, Tesla was the original action meme. Back when GameStop Corp. was nothing more than a failing video game store, an ecosystem of YouTube channels, podcasts, and Reddit threads of hobbyist analysts fostered a devoted community of Musk fans who made a fortune betting on GameStop’s clean energy mission. the company and its visionary CEO.

Now those days of exorbitant profits seem to be over. Musk’s controversial acquisition of Twitter has undermined investor confidence. Musk has sold billions in Tesla stock to finance the purchase, and he spends more time running the social network and tweeting controversial views on everything from politics and birth rates to the Ukraine war. Tesla’s stock price has fallen 37% since Dec. 1, and is now trading at a whopping $123, down from more than $400 it was once worth.

Nosedive

For Musk fans, it’s hard to believe what a difference a year makes. Michael Williams, a 49-year-old trader from Utah, began buying shares in the company in 2018, using complicated option strategies to make large bets.

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He admits he was lucky. Using call options, he converted about $3,000 in his Robinhood account into “several hundred thousand”. Then he went one step further, accumulating about 90% of his 401(k) plan in Tesla. Soon $40,000 turned into $800,000.

It didn’t last long. In mid-2021, Williams made a couple of bad trades, in which he first lost $600,000 and then $200,000. Now, the value of his 401(k) plan has decreased to about $300,000. And that Robinhood account? It’s about $50.

Williams, who works in telecommunications, has sold about half his shares in Tesla, but now plans to slowly increase his stake again. He continues to believe in Musk, even though he says the billionaire is prone to “do nonsense.”

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The straw that broke the camel

Denver-based Adrian Mora bought his first shares of Tesla in July 2022 after hearing about the electric Semi trucks the company began delivering late last year. This 42-year-old man, who works for the Department of Veterans Affairs, had recently sold his house and decided to invest the money—about $210,000—in Tesla. Since then, his shares have lost 70% of their value and he is considering selling what he has left.

“They are the savings of my whole life”, said. “I come from a Hispanic family, and you always hear that my people never get ahead because we never invest. But now I see that there is a good reason why my people never invest: you can lose all your money.

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For New York’s Karim Jovian, this year will be crucial in determining whether Tesla can turn around. The 29-year-old content creator began investing in the car company in 2020 after hearing other social media stars rave about Tesla and its potential. He jumped in after stocks plunged at the start of the pandemic.

With about 80% of his net worth in the stock now, he’s worried about all the drama surrounding Musk and how that will affect the share price.

“He talks too much, he’s like, ‘Please shut up’”Jovian said of the CEO.

“I’m definitely considering selling.”

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Faithful followers

Of course, there are some success stories from Tesla operators who came out at the right time. Doug Coyle’s son, Dennis, bought $20,000 worth of company stock after the March 2020 crash, a sum that ballooned to $60,000 in July 2021. So the 36-year-old from New Jersey decided to take the money out and use it for a down payment on a $380,000 house in southern New Jersey that he calls his “Tesla house”.

Since then, he has been slowly rebuilding his position and plans to invest another $20,000 when the share price drops to $85 or $80.

Like father Like Son. His father, Doug, has faith in Tesla as a company and is heartened by the predictions of Cathie Wood of Ark Investment Management, a longtime believer in the stock and whose company recently predicted that the price will rise to at least $500 by 2026. However, he does want Musk to “keep your mouth shut.”

“I still support him 100%”, Coyle said. “It has made me a rich person.”