Tesla’s stock price plunged by more than 10 percent on Friday morning, increasing losses steadily over the previous month that erased about a third of the automaker’s market value amid concerns about flagging sales is.
After recovering some of those losses, the stock was trading at $ 590 at around 1 a.m., down from $ 621 at the end of trading on Thursday. Currently, Tesla, which sells electric cars, batteries and solar panels, has a market value of about $ 565 billion. A month ago, Tesla stock was priced at over $ 870 per share and had a market value of over $ 800 million as many investors bet the company would revolutionize the auto and energy industries, deadly for older and more established companies Deals with the strike.
The sharp decline comes as many investors have pulled back from investing in anticipation of risky stocks and rising interest rates. In addition, auto analysts and sales figures have suggested that Tesla faces tough competition in the United States and China. Analysts at Morgan Stanley said on Wednesday that Tesla launched the Ford Electric’s new electric model, the Mustang Mach E, in the United States last month.
The China Passenger Car Association also said that Tesla sold 15,484 locally manufactured cars in January. This is higher than the year-ago period, but lower than the December total of 23,804. Tesla sales in China fluctuate frequently, when the company exports a batch of cars made at the Shanghai plant to other markets such as Australia and Europe.
Morningstar analyst David Whiston said, “Tesla has really benefited from that aura, ‘it doesn’t really matter how many vehicles we sell this year or how much cash we burn.” “It’s all done, ‘Where are we going to be five or 10 years now?” But recently there has been a little more unrest. “
But Mr Whiston said the Tesla stock price was incredibly volatile and looking at it up and down can make it difficult to extract clear trends. “The way it has fluctuated, I wouldn’t be surprised if it is above $ 700 next week,” he said.
Institutional investors have been selling some of their bets at Tesla in recent weeks, but regulatory forms that would disclose such sales would not be out for weeks. Some large shareholders dropped their Tesla holdings last year. Bailey Gifford, a Scottish investment manager and longtime Tesla shareholder, cut his position to 27 million shares at the end of last year, down from around 59 million shares at the end of June.
Tesla has long been a favorite target of investors who profit from the fall in the share price. Known as short sellers, they borrow shares and sell them, hoping to buy them back at a lower price in the future. If successful, short sellers can pocket the difference between the sale and the purchase price, but if share prices rise too much, trades can also go horribly wrong, as in recent gamestop, video The game took place with the retailer’s shares.
As Tesla’s stock had increased in recent years, short sellers would have lost billions of dollars on their bets, perhaps some of them turned away from betting against Tesla, which gained widespread popularity among individual investors, including Many of the company’s executives respect Eleven. Oysters In mid-February, about 48 million Tesla shares were sold, according to the Nasdaq Stock Exchange, down from around 61 million shares at the end of 2020.
Competitive threats against Tesla are increasing, but the company has had enough cash to finance its operations for some time. It sold more than $ 12 billion of new stock to investors, taking advantage of its soaring stock price last year and now has more than $ 19 billion in cash. Tesla Spent 1.5 billion dollars At bitcoin earlier this year, and if the company incurs a large loss on that wager, it will still have significant cash on hand.
Despite the recent decline, Tesla shares are still up nearly 300 percent over the past 12 months. And the company’s market value exceeds the combined market capitalization of Toyota Motor, Volkswagen, Daimler, General Motors and Ford – companies selling many more cars than Tesla.