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