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Tesla’s selloff jeopardizes its $1 trillion-club status

Tesla Inc. slumped in premarket trading Wednesday, threatening to push the company’s valuation below the $1 trillion mark amid a selloff that has already erased more than $200 billion from its market capitalization.

Shares of the electric-vehicle firm have plunged nearly 17% since Thursday’s close, including their worst back-to-back plunge in 14 months as investor sentiment soured amid a wave of negative headlines.

Tesla Chief Executive Officer Elon Musk sparked this week’s rout after asking his Twitter followers over the weekend if he should sell 10% of his stake in the firm. That was followed by news of his brother Kimbal selling some shares just before the poll. There was also a Business Insider report on Michael Burry, the investor made famous by “The Big Short” movie, saying Musk may want to sell stocks to cover his personal debts. 

The shares were trading down 1.4% at $1,009 as of 8:52 a.m. in New York. If the declines hold in regular trading, Tesla’s valuation will be just about $1 billion shy of losing the trillion-dollar club membership.

The gloom spread over to industry peers in premarket trading, with Lucid Group Inc., Nikola Corp., Nio Inc., ChargePoint Holdings Inc., Volta Inc. and Blink Charging Co. leading the declines.

The rapid drop in value comes just over two weeks after Tesla became one of only five publicly traded US companies to have a valuation north of $1 trillion. Still, despite the recent pressure, the stock has returned about 45% this year, compared to the S&P 500 Index’s 25% advance.

 

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