Queasy Rider: Tesla Shares Tank
Tesla shares slipped more than 10 percent on Monday, falling to $121.54, a four-month low. And while the electric automaker’s stock is still up over 250 percent this year, it has lost more than 35 percent of its value since setting a record high of $194.50 in late September.
The reason? There are a few. A trio of Tesla Model S fires, for starters. While each was caused by a collision with another car or piece of roadway debris, the fact that they all occurred over the course of a five-week period is clearly troubling investors. Three may not always be a trend, but it certainly looks like one.
Also weighing on the company, recent third-quarter earnings that weren’t as impressive as Wall Street had hoped. While Model S deliveries were ahead of Tesla’s own expectations, they were lower than those of analysts, and that discrepancy has been troubling the company’s share price ever since the day it reported.
Finally, there’s likely quite a bit of profit-taking going on. Some investors who bought into Tesla before its massive run-up are almost certainly cashing in now as the company’s stock drifts back to earth. A wise move, perhaps, given Tesla founder and CEO Elon Musk’s comments on the company’s valuation, which he considers too high.
“The stock price that we have is more than we have any right to deserve,” Musk told Bloomberg in October, echoing similar comments made in August. “I’m not going to sit here and say we deserve every penny of that. I think it’s more than we have any right to deserve.”