Twitter Isn’t Driving Tesla Share Price – It’s Chinese EV Rivals

  • Data from AI news analytics pioneer Blu Analytics highlights how EV competition is a bigger influence on Tesla than Twitter acquisition
  • Analysis covered five million news articles on Tesla, Twitter, and Elon Musk

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 analyze, 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 this year.

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 the 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: “The storyline that Tesla behaves like a Chinese electric vehicle stock explains the performance better and is more grounded in facts than sensational headlines that Musk is distracted.

“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. Tesla behaves like a Chinese automobile stock.”

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, which starts at 4pm CEST.

About Blu Analytics

Blu Analytics is a pioneer in the field of news analysis based on Artificial Intelligence/Machine Learning for Capital Markets. It is building a deep artificial intelligence technology which is able to analyse, process and understand news in real-time to deliver actionable insights and trading signals. The company is based in Münster in Germany For more information go to Blu Analytics | News-Analytics-For-Financial-Markets-English