On Tuesday, shares of Tesla, the highest stock in the market for more than a year, has plunged six percent after closing down 8.5 percent on Monday. It has completed its gains for the year. On January 26, Tesla’s stock closed at a record above 833 dollars and plunged.
The share tumbled 619 dollars on Tuesday, and this is the first time for Tesla when its shares have plunged below seven-hundred dollars since December 31. On December 21, the sharp decline in Tesla’s stock decreases their level as the firm stepped into the S&P 500. Moreover, it even put Elon Musk (Tesla CEO) at number two position in the wealthiest body in the world, behind Jeff Bezos (Amazon founder). In this year, both competitors have taken each other position several times.
Why is Tesla’s stock selling off?
Earlier this month, the company declared that it had invested 1.5 billion dollars in bitcoin. The action helped the company by a quick profit of one billion dollars, which is a higher amount than Tesla made from selling cars in a single year.
Tech expert for Wedbush Securities, Daniel Ives, who usually acted bullish on Tesla’s shares, said that Bitcoin is the smart move at an adequate time for Tesla in his opinion, but on the downside, its playing with risks, firecrackers, and volatility are included to the company’s story.
Reduction in Model Y pricing
Previous Thursday, the company had lowered the price of the cheapest variant of its Model Y vehicle and its remarkable selling Model 3 cars by 2,000 dollars each.
Another critic on Tesla shares, Gordon Johnson of GLJ Research, said that they see the plausible reasons as either; the mix was skewed significantly to the cheaper version, and thus it was going to kill the boundaries, or more probably there just was not much demand for Tesla’s lower variant.
Auto-manufacturers have previously made ambitious targets regarding their own EV sales. A week before, GM (General Motors) pushed an SUV variant of its Chevrolet Bolt, which has less price than Model Y, and declared that it aims to roll out only emissions free cars after 2035.
Many news reports suggested that the tech giant Apple is also thinking about a partnership with an auto-manufacturers to expand their business towards cars.