Tesla's extends 2-day plunge to 17% as epic rally takes a breather | Currency News | Financial and Business News

Getty Images / Bill Pugliano

  • Tesla tumbled as much as 9% in early Tuesday trading, extending losses following a similarly sized plunge the session prior.
  • The sell-off has dragged shares to their lowest since December and led CEO Elon Musk to relinquish his title as the world’s richest person.
  • Tesla’s latest slump follows confusion over Model Y availability and risk from plummeting bitcoin prices.
  • Watch Tesla trade live here.

Investors continued to dump Tesla in early Tuesday trading, dragging shares to their lowest level since late December.

The automaker sank as much as 9% before markets opened. The drop is set to extend a three-day losing streak for Tesla stock that intensified at the start of the week. The Wednesday-to-Monday losses have seen Tesla’s total market cap drop by $80 billion and led CEO Elon Musk to relinquish his title of the world’s wealthiest person.

Tesla traded at a record high of $900 just one month ago as extreme bullishness toward the company’s growth fueled massive gains. Valuation concerns cut into the rally and saw shares waver around $850 through much of February.

Shares closed 9% lower on Monday after the company reportedly halted new orders for the lowest-price version of its Model Y crossover. Musk clarified in a Monday tweet that the model was still available “off menu,” adding he doesn’t think the vehicle’s range “meets the Tesla standard of excellence.”

The move came less than a week after Tesla slashed the variant’s price to $39,990 from $41,990. The automaker also lowered prices for longer-range Model Y versions and its Model 3 sedan.

The price adjustments are “all a poker move” meant to stoke demand for Model Y and Model 3 in China, Wedbush analyst Dan Ives told Insider in an email. Ives has repeatedly deemed China a “linchpin” for Tesla’s continued growth.

The decline was also driven by Musk’s warning of elevated cryptocurrency prices. The CEO took to Twitter on Saturday to caution that bitcoin and Ether prices “do seem high” following the tokens’ recent rallies. Bitcoin surged to record highs earlier in February after Tesla announced it purchased $1.5 billion of the cryptocurrency as a reserve asset.

Musk’s comments contributed to a sharp reversal of the token’s gains. Bitcoin sank below $45,000 on Tuesday, placing the cryptocurrency on track for its biggest single-day loss since March 2020.

Tesla’s bitcoin position directly ties the company’s growth to the highly volatile token, Wedbush’s Ives told CNBC on Tuesday. While the investment initially fueled strong gains for the automaker, it comes with added risk, he added.

Tesla closed at $714.50 per share on Monday, up 2.8% year-to-date. The company has 25 “buy” ratings, 47 “hold” ratings, and 20 “sell” ratings from analysts.

Markets Insider

Source: Read Full Article