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Tesla lost $80 billion of market value

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
Tesla stock dove 34% in a week

Tesla's days of swiping Wall Street off its feet seem to be over if we consider the Tuesday trading session.

Tesla shares reported the worst single-day drop in their history and added to the significant sell-off in tech stocks. The stocks closed lower by 21.06%, making the company lose roughly $80 billion in market cap. The amount is higher than the market caps of General Motors and Ford combined. At a weekly level, shares have dropped more than 34%. 

The drop was caused by the company's exclusion from the S&P 500, which was long touted given the fact that Tesla posted higher-than-expected #Q2 figures, and it later decided on a 5-1 stock split

Its exclusion from the S&P 500 came unexpectedly. In an unpredicted announcement, the index decided to add Catalent – a pharmaceutical tech company, Teradyne – a semiconductor equipment maker, and Etsy – an online craft seller. According to specialists, the exclusion normalized the company’s valuation. 

At the same time, the electric automaker Nikola Corp, a new competitor of Tesla, saw more than 40% increase in its stock price after General Motors announced it would purchase a 11% stake in the company.

Year-to-date, Tesla stock price is still up almost 284%. It closed yesterday’s session at $330.21, after reaching an intraday high of $502.49.

Sources: reuters.com, fortune.com

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.