In hindsight, it's clear that the major theme of 2022 was a reckoning for the tech sector. It wasn't entirely surprising given what transpired in 2021 when most of the speculative tech stocks, crypto market, and other high-multiple equities were massacred due to the combination of higher rates and a radical change in investor sentiment.

What is somewhat surprising and notable is that we are seeing the rot spread into what are considered to be more established tech companies with solid businesses, steady revenue streams, and positive cash flow. The most prominent example is the FANG stocks which are down between 30% and 60%.

Tesla (TSLA  ) is somewhat in the middle of both extremes, and it's also in the middle of its own slow-motion crash. The stock made its all-time high in November 2021. Since then, it's down 73%. Remarkably, this has come despite the company continuing to grow and become profitable.

One theory behind this decline is that Tesla is simply a victim of market circumstances given declines in other high-multiple, EV, and tech stocks. On the surface, this makes sense, but it misses the fact that the bulk of Tesla's losses has come in the last 4 months.

Thus, there is a more comprehensive theory that explains the crash in Tesla. Until September of this year, Tesla was trading in tandem with the higher-quality tech stocks and only was off by about 25% from it's all-time high. But, the losses intensified following CEO Elon Musk's acquisition of Twitter.

This makes sense for a couple of reasons the most obvious being that Musk had to sell Tesla shares to fund the purchase. It's quite obvious that the Twitter buy is going to be a major financial loss and is taking time and attention away from Tesla. The other issue is that Musk's antics have made him a pariah in the eyes of many liberals, who constitute a major portion of his customer base.

At the same time, conditions are getting tougher for Tesla. It still hasn't been able to fully deploy its full self-driving technology which has been promised for years, and competitors are catching up. Additionally, a slew of new EVs is being released over the next couple of years which could impact demand for Tesla.

All in all, there are a variety of factors to explain the moribund price action in Tesla. However, it's clear that Musk's Twitter acquisition was a major catalyst.