Ford Shares Plunge Over 50%, Battering Shareholders

Ford Motor Co. (NYSE: F) posted what should have been considered strong results for June. Its stock continued its months-long sell-off anyway. Shares are now down well over 50% from the all-time high.

Ford’s total U.S. vehicle sales rose 31.5% to 152,262. The performance was markedly better than for most large car companies, the sales of which have been hampered by an industrywide shortage of microchips used for car electronic systems. Sales of Ford’s extremely popular F-series pickup rose 26.3% to 57,673. This should be considered only partially positive news. The F-series represented 37.9% of all Ford’s sales for the month. If supply chain interruptions dent F-series sales, all of Ford’s monthly figures could be seriously affected.

The Ford sales figures also showed one of the manufacturer’s primary weaknesses. Though Lincoln sales were up 40.6% to 6,894, they lag well behind industry leaders BMW, Mercedes and Lexus. That is a hurdle Ford has not been able to clear for decades.

Finally, Ford bragged about its electric vehicle (EV) sales. They rose 76.6%, but only to 4,353. The number is miles behind industry leader Tesla. Ford should have skipped highlighting what is clearly still a weak spot.

Ford’s future, as management has stated, is EV sales, led by the F-150 Lightning. Management also has said that a bungled launch will damage the entire company. The roll-out of the pickup is in the early stages, which may be a primary concern of investors.

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Ford’s stock reached $25.87 a share early in the year. It has raced down quickly to its current price near $11. This partly is because of the general market sell-off. It also is due to a looming recession. In addition, Ford’s EV efforts cannot be gauged so early in their development. Ford also faces that semiconductor shortage, which will plague the entire industry until well into 2023.

Ford’s stock will not recover this year. The company’s present challenges are just too great, and the overall stock market is unlikely to lift shares. The market faces too many significant problems. Ford shareholders will have to be patient until next year and hope that by then supply chains and the economy cooperate.

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