Tesla's stock price has sunk amid a broader sell-off in equity markets amid slower economic expansion and rising inflation. Investors have fled high-growth companies as central banks around the world prepare to embark on a series of interest rate hikes.
Full Answer
What's happened to Tesla's stock?
Shares in electric car giant Tesla Inc. ( NASDAQ: TSLA) have plunged more than 12% to $US876.42 in overnight trading on Wall Street - matching their biggest daily loss in the last 20 months and wiping out more than $US114 billion from the company's market value.
Is Tesla a risky stock to buy?
While Tesla's stock is prone to wild swings, its rise has also been accompanied by a corresponding change in the perception of risk in the markets. The electric car maker's choppy ascent since its debut in the stock market in 2010 has frequently been punctured by short sellers, who claim that electric vehicles are expensive and have no future. 7
Could this electric pickup company be a problem for Tesla stock?
This electric pickup is made by Rivian, and that could be a problem for Tesla stock. Image source: Rivian. Rivian seeks to go public as early as September, Bloomberg reports, targeting a $50 billion valuation initially.
Why did Tesla collapse after Elon Musk bought twitter?
Tesla shares collapsed Tuesday as investors continued to digest the implications of Twitter’s acceptance of CEO Elon Musk’s $44 billion bid for the social media giant, tacking onto already-staggering losses spurred by the Federal Reserve's looming interest rate hikes. attention, one analyst says.
A rival is coming to market, on car lots and in the stock market as well
I like things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well.
What happened
Shares of electric-car maker Tesla ( NASDAQ:TSLA) dropped nearly 6% in early trading on Wednesday in response to a Bloomberg report last night that upstart e-car rival Rivian is preparing for an IPO.
So what
Rivian seeks to go public as early as September, Bloomberg reports, targeting a $50 billion valuation initially. That may not sound like much of a threat to Tesla, which is currently valued at nearly $800 billion.
Now what
Citing people familiar with the matter, Bloomberg notes that Rivian's IPO might not happen until late this year, or even 2022. Also, the valuation could wobble. As recently as January, private funding of Rivian valued the company at less than $28 billion, barely half the valuation it is said to be targeting.
The company's shares have entered 'bear territory,' according to CNBC
Rakesh Sharma is a writer with 8+ years of experience about the intersection between technology and business. Rakesh is an expert in investing, business, blockchain, and cryptocurrencies.
Defective Solar Panels and Installation Problems
Steven Henkes, who is the whistleblower, was a manager at car maker Toyota Motor Corporation's ( TMC) North American quality division. He joined SolarCity, which is now part of Tesla Energy, months before the company was acquired for $2.6 billion in 2016.
A Growing Business
Tesla purchased SolarCity, the division responsible for solar panel installations, in a controversial acquisition back in 2016. The company was started by Tesla CEO Elon Musk's cousins Lyndon and Peter Rive.
Can the electric car maker sustain its momentum?
Rakesh Sharma is a writer with 8+ years of experience about the intersection between technology and business. Rakesh is an expert in investing, business, blockchain, and cryptocurrencies.
The Tesla Financial Complex
While retail investors (and CEO Elon Musk’s tweets) have played a major role in Tesla's ascent, at the heart of the electric car maker's meteoric rise lies what the Financial Times terms a "Tesla financial complex." 1 Included in this complex are an assortment of investment products— options, equity-linked funds, climate tech-focused investment vehicles—and they exert a massive influence in the equity and derivatives markets..
Should Investors Expect Further Gains?
During times of excess, fundamentals take a backseat. And so it has been with Tesla. Even though the company makes a fraction of the cars of its competitors such as Ford Motor Company ( F) and General Motors Company ( GM ), it sported roughly five times their combined market cap in December 2021.
Where is Tesla made in 2021?
Investors and analysts have reason to believe that Tesla's production capacity will grow substantially in 2021 as new manufacturing plants in Berlin, Germany and Austin, Texas get up and running. And many think demand for Tesla's cars will keep growing, especially in China — where the EV maker has already done exceptionally well.
How much did Tesla lose in 2020?
Short sellers lost $38 billion over the course of Tesla's monumental 2020 rally. That epic surge has made Tesla the most valuable car company in the world, catapulting it above and beyond Goliaths like Toyota and Ford.
How many cars did Tesla sell in 2020?
Tesla also doesn't sell even close to the amount of vehicles as the competitors its valuation now dwarfs. Tesla sold just shy of 500,000 cars globally last year. In the US alone in 2020, GM's total sales were more than five times that amount, while Ford sold nearly 800,000 F-Series pickups.
Who is Elon Musk?
There's a final factor that can't be overlooked: outspoken chief executive Elon Musk. The eccentric, meme-loving mogul has inspired legions of loyal Tesla evangelists and investors, largely through his irreverent Twitter feed and other ambitious ventures like SpaceX, PayPal, and Neuralink.
Is Tesla's valuation grounded in reality?
Tesla's sky-high valuation, many argue, isn't grounded in reality. Despite all of those potential upsides, many experts argue that the frenzy surrounding Tesla is nothing more than a bubble that will burst sooner or later. By conventional measures, they point out, Tesla's valuation is completely out of whack with the rest of the auto industry.
