Tesla loses a third of its value for the third time in a year

Tesla Inc’s stock extended losses on Monday and is now down by a third from its January record high, making it the third time in about a year that the electric car maker’s shares have corrected that dramatically.

With investors worried about rising interest rates and dumping high-valuation stocks in recent weeks, Tesla’s market capitalization has fallen by almost $300 billion since its 26 January record high to $550 billion, moving behind Facebook Inc, which it overtook in December after joining the S&P 500.

Tesla shares fell over 4% on Monday and were down almost 35% from their peak on 26 January. The ARK Innovation ETF, which has 10% of its assets invested ark-funds.com/arkk#holdings in Tesla, fell 6%.

Technology and other growth stocks have fallen broadly since 12 February, when the Nadsaq closed at its most recent record high. However, Tesla’s decline during that time has been much deeper than Wall Street’s other heavyweights.

Tesla’s surge in recent months is rooted in expectations it will expand car production quickly and profitably. The stock’s latest dip follows a tweet by Chief Executive Elon Musk on Saturday that an update on Tesla’s planned Cybertruck pickup would likely be provided in the second quarter. Musk unveiled the Cybertruck in 2019.

The most volatile among Wall Street’s largest companies, Tesla’s shares have fallen by amounts similar to or greater than the current selloff twice since early 2020. The stock slumped over 60% in February and March last year, when the coronavirus pandemic shocked global markets. After soaring to new highs in August, it dropped 33% before resuming its meteoric rise.

Tesla is now down almost 30% since the Nasdaq peaked on 12 February, reducing its gain in the past six months to about 43%. Since 12 February, Apple Inc is down about 13%, with Amazon.com Inc, Microsoft Corp and Facebook Inc down less than 10%.

Since Tesla announced on 8 February that it bought $1.5 billion worth of bitcoins, its stock has steadily fallen, while the price of bitcoin has climbed over 10%. Tesla said it bought the bitcoins during January, and if it hypothetically bought them at the mid-point price of about $45,000 for that month, its investment could now be worth around $1.7 billion, according to Reuters calculations.

 

Similar articles

  • Digital business ups Siemens profits

    Digital business ups Siemens profits

    The industrial conglomerate Siemens raised its profits outlook above the average level of competitors on the back of successful restructuring which combines core business activities with digital upgrades, Reuters reported. The forecast was backed by targets unveiled in the first strategic blueprint under new Chief Executive Roland Busch.

    14
  • Visa buys European Tink platform for €1.8bn

    Visa buys European Tink platform for €1.8bn

    The international card operator Visa announced it had agreed terms to acquire European open banking platform Tink for a total of 1.8 billion euros, Reuters reported. The deal comes in effect a few months after Visa dumped plans to acquire US rival Plaid. Tink was established in Sweden in 2012 and enables banks and other financial firms to access consumer financial data more easily. It is used by more than 3,400 banks and other institutions, as well as over 250 million customers across Europe.

    14
  • $500m fund compensates relatives of Boeing 737 MAX victims

    $500m fund compensates relatives of Boeing 737 MAX victims

    US announced a special $500m fund targeted to compensate relatives of victims of Boeing 737 MAX crashes, Reuters reported. A total of 346 people died in two Boeing 737 MAX crashes in 2018 and 2019. The fund is part of a settlement which was reached with the US Justice Department. Boeing in January agreed to pay the $500 million to compensate the heirs, relatives and beneficiaries of the passengers who died in Lion Air Flight 610 and Ethiopian Airlines Flight 302 in 2018 and 2019.

    36