Tesla Inc. (TSLA) – Get report Shares traded lower again on Friday, extending a move that raised nearly $ 275 billion worth of cleaner carmaker caused by rising interest rates and the ongoing correction in bitcoin.
Tesla shares have fallen nearly 30% since the stock closed at a record high of $ 883.09 on January 26, just one day before the 10-year yields of the Treasury bond hit their 65 percentage point amid accelerated inflation forecasts and improving economic growth prospects.
Technical stocks, especially stocks with a forecast that is further forecast, are particularly sensitive to interest rate hikes, as investor accounting assigns a lower ‘present’ value for dollars earned in the future.
Tesla, which has recorded just one profitable year since its inception in 2011, is expected to consistently increase its earnings over the next few years as deliveries accelerate and drive up production in new facilities in Texas and Germany, increasing the value of ‘today’ more make dependent. on interest rate changes as companies that are currently black.
Tesla shares were down 11.33% on Friday morning to trade at $ 551.00 each, the lowest since December 2 and a move that would push its market value to just over $ 560 billion. Tesla peaked in early January with a market capitalization of about $ 834 billion.
ARK Innovation ETF (ARKK) – Get report Shares, meanwhile, have turned negative for the year, in part due to Tesla’s weakness. Cathie Wood, one of last year’s outstanding fund managers and head of the $ 60 billion fund, was a longtime proponent of both Tesla and Bitcoin, two of her fund’s key assets.
Related to a second vulnerability in Tesla shares that could be linked to the recent $ 1.5 billion purchase of bitcoin should be considered as a so-called ‘intangible’ asset on the corporate balance sheet.
This means that, like the value of ‘goodwill’, it cannot be increased, but that it can be ticked off as bitcoin prices fall, leaving Tesla’s share price at least partially subject to bitcoin fluctuations.
Bitcoin prices have fallen nearly 20% since reaching an all-time high of $ 58,000 on February 21, in part due to rising bond yields that make U.S. dollar stocks more attractive.
The short-selling interest in Tesla also remains strong at $ 32.16 billion – or 6.4% of the outstanding fleet. According to data from S3 Partners, Tesla pants are 1.18 billion dollars higher since last week.
Matches against Tesla made short sales this year with about $ 4.28 billion in profit, including $ 1.94 billion from the nearly 5% drop from yesterday.
The basics of the car market are also not working in Tesla’s favor: earlier this week, its rival, NIO NIO, warned in China that sales of electric cars in the world’s largest market during the first three months of the year would delayed to a larger-than-expected loss in the fourth quarter.
Tesla sold 15,484 of its China-made cars in January, the China Passenger Car Association (CPCA) said last month, up from 23,804 in December. Tesla’s sales in China were about a fifth of its total sales in 2020 – when it delivered a record 499,550 vehicles – compared to just 12% in 2019.
CPCA will publish February’s sales data on March 8.
One investor who does not worry about the rate hike of the fundamentals is billionaire Ron Baron, an early Tesla bull who runs Baron Capital Management.
Baron, which owns 1.1 million Tesla shares in its personal account, has reduced Baron Capital’s exposure by about 1.7 million shares over the past six months at an average price of $ 666.70, but it still expects the share will rise to about $ 2000 in the next ten years. years.
“When we started talking about Tesla in 2014, I said we would make at least 20 times our money, and everyone was skeptical,” Baron told CNBC on Thursday. “In most people’s opinion, electric cars were unlikely to dominate.”
“Now, even General Motors GM expects to have an electric fleet by 2035, so it’s going in that direction and Tesla is the leader,” he added.