Tesla has misplaced a quarter-trillion in market cap prior to now month as inventory dives
Tesla Inc. shares fell for the fifth consecutive year on Monday. That was part of a sell-off that dropped the company’s market cap by more than a quarter of a million dollars in just over a month.
Tesla stock TSLA, -5.84%, is down 21% in the last five days of trading and is down 34% last month. Since peaking on Jan. 26 with a market cap of around $ 850 billion, Tesla has lost around $ 277 billion in valuation.
Tesla also entered its third bear market last year after strong sell-offs in September and March 2020 – defined as a decline of 20% or more from its recent high. Still, the electric car maker’s volatile stocks have risen more than 360% in the past 12 months.
Tech stocks in general have been hit hard in the past few weeks, with the Nasdaq Composite COMP falling -2.41% to 9% over the past month. Electric vehicle manufacturers in particular have fallen sharply. Among Tesla’s competitors, Nio Inc. NIO (-7.61%) is down 38% last month, while Nikola Corp. NKLA (-1.88%) fell 38% and Li Auto Inc. LI (-5.03%) fell 30%.
One reason is a global chip shortage that has impacted automakers’ utility lines. In February, Tesla briefly closed its facility in Fremont, California, and CEO Elon Musk blamed a “parts shortage”. CNet reported Monday that customers who buy Model 3 and Y vehicles have been months behind on deliveries.
Rising interest rates have also taken a toll as high-growth companies like Tesla rely on future cash and cash equivalents that are depreciated as interest rates rise. An estimate by Barron’s found that, as an admittedly simplified example, every 1% increase in interest rates affects the value of Tesla by about $ 200 billion.
See: Tesla crater. That’s how bad the interest rates hurt
Tesla stock closed at around $ 568 per share on Monday, below FactSet’s average target price of $ 616.
ARK Investment founder Cathie Wood said her company will soon set a new price target on Tesla stock, but she said Monday she was still bullish about the company.
“Our trust in Tesla has increased for several reasons,” Wood said in an interview on CNBC’s “Closing Bell,” referring to Tesla’s market share and progress in autonomous driving.