Shares of Tesla Inc. fell Monday for the fifth straight session, part of a sale that removed more than a quarter of a trillion dollars from the company’s market cap in just over a month.
Stock Tesla TSLA,
decreased by 21% in the last five trading days and decreased by 34% in the last month. Since reaching its peak on January 26, with a market capitalization of around $ 850 billion, Tesla has lost about $ 277 billion in valuation.
Tesla has also entered the third bear market – defined as a 20% or more drop from a recent high – in the last year, after steep sales in September and March 2020. However, the volatile shares of Electric vehicle manufacturer have increased more than 360% in the last 12 months.
Technology stocks have generally been hit hard in recent weeks with Nasdaq Composite COMP,
down 9% in the last month. Electric vehicle companies in particular have fallen hard. Among rivals Tesla, Nio Inc. NIO,
fell 38% in the last month, while Nikola Corp. NKLA,
decreased by 38%, and Li Auto Inc. LI,
is reduced by 30%.
One of the reasons is the global lack of chips that has affected the supply lines of car manufacturers. In February, Tesla briefly closed its plant in Fremont, California, which CEO Elon Musk blamed for a “lack of parts.” CNet reported on Monday that customers buying Model 3 and Model Y vehicles are facing a delay in delivery months.
Rising interest rates have also had an impact, as high-growth companies such as Tesla depend on future cash, which is devalued as rates rise. An estimate by Barron found that, as a simplified example, every 1% increase in the interest rate affects Tesla by about $ 200 billion.
See: Tesla creates. That’s how interest rates suffer
Tesla shares closed at about $ 568 a share on Monday, below the average target price of $ 616 by analysts tracked by FactSet.
ARK Investment founder Cathie Wood said her company would soon set a new price target for Tesla shares, but said Monday it was still optimistic for the company.
“Our confidence in Tesla has grown for several reasons,” Wood said in an interview with CNBC’s “Closing Bell,” citing Tesla’s market share and progress in self-driving.