The stock was down as much as 12 percent on Tuesday after falling 4.8 percent on Monday after a series of bad headlines.
from Bloomberg
Tesla Inc. lost nearly $ 175 billion in valuation and was heading for its biggest two-day decline in 14 months as the rise in stocks lost momentum on a host of negative news.
Following Elon Musk’s Twitter poll, which asked voters over the weekend whether to sell 10% of his stake in the electric vehicle company, the drumming of negative headlines peaked, followed by news that his brother Kimbal was about to the survey had sold some stocks. There was also a Business Insider report on Michael Burry, the investor made famous by the movie The Big Short, saying that Musk may want to sell stocks to pay off his personal debt.
“The stock is extremely overvalued from a long-term perspective and investors are struggling with valuation,” said Matt Portillo, analyst at Tudor Pickering. He noted that Musk’s stock sales survey gave investors “an excuse to back off.”
The stock was down as much as 12% on Tuesday after falling 4.8% on Monday.
Despite the recent decline, Tesla is still up 46% this year and held a market value of over $ 1 trillion, a key figure it hit in late October. Most of those gains came after the company posted strong third-quarter results and deliveries that significantly exceeded market expectations and when rental car company Hertz Global Holdings Inc. placed a major order for Tesla cars for its fleet.
Matthew Maley, chief marketing strategist at Miller Tobacco + Co., said the sell-off of Tesla shares was part of a normal and healthy pullback. He called it a “response to a very overbought condition”.
The latest foray by chip maker Nvidia Corp. Self-driving cars may have put further pressure on Tesla, as the electric vehicle maker’s lead over its competitors in autonomous driving technology is often cited as the main reason for its premium multiple.
“The announcement of Nvidia autonomous vehicle (AV) technology is a factor in today’s sell-off,” said Seth Goldstein, an analyst at Morningstar. Even if Tesla currently has a head start on AV, if Nvidia’s technology works well and “appears in other automakers’ vehicles from model year 2024, then Tesla will face increased competition”.
Burry did not immediately respond to a message from Bloomberg News to confirm reports about the tweet, which is not currently appearing on his Twitter feed. Separately, Kimbal Musk announced in a file that it sold 88,500 shares of Tesla on November 5.
