The shares of Tesla Inc. fell on Monday for a fifth consecutive session, part of a sell-off that knocked off just over a quarter of a billion dollars from the company’s market capitalization.
Tesla stock TSLA,
has sunk 21% over the past five trading days and down 34% over the past month. Since peaking on January 26 with a market capitalization of about $ 850 billion, Tesla has lost a valuation of about $ 277 billion.
Tesla also entered its third bear market – defined as a decline of 20% or more from a recent high – in recent years, following strong sales in September and March 2020. Yet the volatile shares of the electric car maker are more than 360% over the past 12 months.
Technical stocks have been hit hard in recent weeks, with the Nasdaq Composite COMP,
last month by 9% lower. Companies for electric vehicles in particular have fallen hard. Among Tesla’s competitors, Nio Inc. NIO,
has plunged 38% in the past month, while Nikola Corp. NKLA,
it fell 38%, and Li Auto Inc. LI,
is 30% off.
One reason for this is a worldwide shortage of chips which has an effect on the supply lines of car manufacturers. In February, Tesla briefly shuts down its plant in Fremont, California, blaming CEO Elon Musk for a ‘parts shortage’. CNet reported Monday that customers who buy Model 3 and Model Y vehicles are a month-long backlog for delivery.
Rising interest rates have also taken a toll, as big-growth companies like Tesla depend on future cash, which is devalued as rates rise. One estimate by Barron’s found that, as an admittedly simplified example, any 1% interest rate hike would hurt Tesla’s value by about $ 200 billion.
See: Tesla is cratering. This is how hurtful interest rates are
Tesla shares closed at around $ 568 per share on Monday, below the average target price of $ 616 by analysts followed by FactSet.
ARK Investment founder Cathie Wood said her firm would soon set a new price target for Tesla shares, but she said Monday she is still strong about the company.
“Our confidence in Tesla has risen for a number of reasons,” Wood said in an interview on CNBC’s “Closing Bell,” referring to Tesla’s market share and progress with autonomous management.