Tesla's Stock Drops 30% in a Month... Yet Remains the Top Net Purchase by Foreign Retail Investors

Stock price dropped 30% in a month
But overwhelming No.1 in net purchase settlements
Seems to be judged as a buying opportunity at a low price

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Despite the decline in Tesla's stock price, overseas stock investors (Seohak Gaemi) continue to show strong affection for Tesla. Rather, they are expanding their holdings, viewing the price drop as a buying opportunity.

According to the Korea Securities Depository's securities information portal (SAVRO) on the 30th, Tesla ranked first in net purchase settlements by domestic investors over the past month from October 28 to November 29. During this period, Seohak Gaemi net purchased Tesla shares worth $468.05 million (approximately 621.1 billion KRW). The second most purchased stock was the U.S. semiconductor inverse leverage ETF (DIREXTION DAILY SEMICONDUCTOR BEAR 3X ETF), with net purchases of $169.19 million (approximately 224.7 billion KRW). Tesla's net purchase amount was about three times higher than the second-ranked stock, demonstrating overwhelming popularity among Seohak Gaemi. Other top 10 stocks included ETFs tracking the Nasdaq index, TSMC, Amazon, Lucid, mainly ETFs tracking indices, semiconductors, and electric vehicle stocks.

During the past month when Seohak Gaemi were scooping up Tesla shares, Tesla's stock price fell by about 30%. Tesla closed at $228.52 on October 28 and closed at $180.45 on November 29. Compared to the beginning of the year, it has plunged about 55%, nearly halving. Compared to the stock split on August 25 (3-for-1 split at $297.10), it has dropped about 40%.

Despite Tesla's steep stock price decline, Seohak Gaemi continue their net buying spree, analyzing it as a buying opportunity at a low price. In fact, the global investment industry is raising target prices, expecting Tesla's stock price to rise again. Adam Jonas, an analyst at global investment bank Morgan Stanley, said, "Tesla's stock price is approaching $150, providing investors with an opportunity to buy at a low price." Citi Bank also raised its investment rating on Tesla from 'sell' to 'neutral.' Citi Bank forecasted, "In the long term, Tesla will benefit from the Biden administration's Inflation Reduction Act (IRA) and strengthen its market competitiveness."

On the other hand, some advise a conservative approach to Tesla investment. John Locke, an analyst at U.S. research firm 22V, predicted Tesla's stock price could fall to $100. Similar opinions were expressed in the domestic securities industry. Eun-young Lim, a researcher at Samsung Securities, said, "Tesla's sales performance in Q3 fell short of market expectations due to the impact of the economic recession," advising, "Investment opportunities should be judged after observing factory operating rates in Q1 next year and the impact of reduced electric vehicle subsidies in Europe and China."