what happened
Shares of Tesla (NASDAQ: TSLA) slipped sharply on Monday and extended the stock by a few weeks. It ended almost 6% lower today.
Shares of the electric car maker probably declined on Monday, mainly due to a weakness in the overall market, especially among tech stocks.
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Approximately
This reflects the technological share sale on Monday, the technological heavy Nasdaq Compound decreased by 2.4% even if the S&P 500, which is better diversified in other sectors, fell by only 0.5%. Many growth stocks like Tesla have fallen even sharper than the Nasdaq.
Monday’s market dynamics were a continuation of a trend in recent weeks in which technology stocks took a breather after a big rise in 2020. Tesla share has been hit particularly hard and has fallen by more than 30% since mid-February. So far, it has now dropped more than 20%.
Now what
Investors should note that the Tesla share has continued to rise by around 300% over the past twelve months and by 570% since the beginning of 2020. It is therefore not too surprising to see the growth share retreat.
Growth stocks are generally more volatile than the overall market. Investors should therefore plan to be more volatile in stocks like Tesla. On the other hand, shareholders should remain primarily focused on the underlying business of the company. At this point, management has led that the growth in vehicle deliveries should accelerate year-on-year this year compared to last year.
“We plan to increase our production capacity as quickly as possible,” Tesla said in its letter for the fourth quarter. “Over a multi-year horizon, we expect to achieve annual average growth of 50% in vehicle deliveries. In some years, we may grow faster, which we expect to be the case in 2021.”
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