Why Tesla shares are tanking today

Why Tesla shares are tanking today

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tesla (TSLA)&nbsp; shares are tanking today. The stock sank as low as 19% during Tuesday morning’s session. By midday, shares were trading down about 15%.” data-reactid=”17″>Tesla (TSLA)  shares are tanking today. The stock sank as low as 19% during Tuesday morning’s session. By midday, shares were trading down about 15%.

“If you’re a trader, you have to be able to stomach that volatility,” Ari Wald, Oppenheimer senior analyst, told Yahoo Finance’s The First Trade.

The stock is down about 22% over the last three sessions, and about 28% lower from its closing high on August 31.

“This is a stock that had a massive down-turn, yet again, it’s still above its 50-day average,” noted Wald.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The electric vehicle maker was sidelined for inclusion in the S&amp;P 500 (^GSPC), disappointing investors who had speculated the company would be added after posting a fourth straight quarter of GAAP profitability in July.&nbsp;” data-reactid=”25″>The electric vehicle maker was sidelined for inclusion in the S&P 500 (^GSPC), disappointing investors who had speculated the company would be added after posting a fourth straight quarter of GAAP profitability in July. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Meanwhile on Tuesday, Nikola (NKLA) and GM (GM) announced a tie-up to make the electric truck startup’s Badger, which will take on Tesla’s Cybertruck.” data-reactid=”26″>Meanwhile on Tuesday, Nikola (NKLA) and GM (GM) announced a tie-up to make the electric truck startup’s Badger, which will take on Tesla’s Cybertruck.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Also on Tuesday, Tesla disclosed it completed its sale of $5 billion of common shares. The company had announced the planned offering a week ago saying it would sell the shares “from time to time.” Since that announcement, the stock has entered into correction territory, despite a recent price target increase from BofA.” data-reactid=”27″>Also on Tuesday, Tesla disclosed it completed its sale of $5 billion of common shares. The company had announced the planned offering a week ago saying it would sell the shares “from time to time.” Since that announcement, the stock has entered into correction territory, despite a recent price target increase from BofA.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The stock was also under pressure last week after investment firm Baillie Gifford disclosed cutting its position in the electric vehicle maker citing portfolio restrictions.” data-reactid=”28″>The stock was also under pressure last week after investment firm Baillie Gifford disclosed cutting its position in the electric vehicle maker citing portfolio restrictions.

On August 31st, shares began trading on a 5-for-1, split-adjusted basis, surging 12% that day.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The stock split, the first in the company’s history, was&nbsp;announced earlier in August&nbsp;when shares were trading below $1,400. The stock soared in the weeks that followed to close at $2,213.40&nbsp;on the Friday prior to the split.” data-reactid=”30″>The stock split, the first in the company’s history, was announced earlier in August when shares were trading below $1,400. The stock soared in the weeks that followed to close at $2,213.40 on the Friday prior to the split.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Some investors had speculated the company would be added to the index after posting a fourth straight quarter of GAAP profits during its latest quarterly results announced in July.&nbsp;” data-reactid=”31″>Some investors had speculated the company would be added to the index after posting a fourth straight quarter of GAAP profits during its latest quarterly results announced in July. 

BEIJING, CHINA - SEPTEMBER 05: People wear protective face masks as they visit the Tesla booth during the 2020 China International Fair for Trade in Services (CIFTIS) at Beijing Olympic Park on September 5, 2020 in Beijing, China. As China recovers from the COVID-19 epidemic, about 2,000 Chinese and foreign enterprises will participate and showcase their newest technology in public health and digital technology in the China International Fair for Trade in Services. (Photo by Lintao Zhang/Getty Images)BEIJING, CHINA - SEPTEMBER 05: People wear protective face masks as they visit the Tesla booth during the 2020 China International Fair for Trade in Services (CIFTIS) at Beijing Olympic Park on September 5, 2020 in Beijing, China. As China recovers from the COVID-19 epidemic, about 2,000 Chinese and foreign enterprises will participate and showcase their newest technology in public health and digital technology in the China International Fair for Trade in Services. (Photo by Lintao Zhang/Getty Images)
(Photo by Lintao Zhang/Getty Images)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Analysts have been&nbsp;racing to re-rate&nbsp;the stock following its massive rally this year. One analyst called the stock’s valuation “mind-boggling.”” data-reactid=”43″>Analysts have been racing to re-rate the stock following its massive rally this year. One analyst called the stock’s valuation “mind-boggling.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="ARK Invest’s Tasha Keeney recently reiterated the firm’s bullish position on Tesla, telling Yahoo Finance, “We think it’s a leader in electric vehicles and full autonomy.”” data-reactid=”44″>ARK Invest’s Tasha Keeney recently reiterated the firm’s bullish position on Tesla, telling Yahoo Finance, “We think it’s a leader in electric vehicles and full autonomy.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Wedbush’s Dan Ives has&nbsp;told Yahoo Finance Tesla “is a tech company, not an automobile company.” Ives’ price target is $380, with a bull case of $700.” data-reactid=”45″>Wedbush’s Dan Ives has told Yahoo Finance Tesla “is a tech company, not an automobile company.” Ives’ price target is $380, with a bull case of $700.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Not everyone believes in the company’s growth story, however. In late August one analyst told Yahoo Finance, “Tesla is detached from reality,” predicting an $87 price target by the end of 2021.” data-reactid=”46″>Not everyone believes in the company’s growth story, however. In late August one analyst told Yahoo Finance, “Tesla is detached from reality,” predicting an $87 price target by the end of 2021.

Year-to-date, Tesla is up about 330%.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Ines covers the U.S. stock market. Follow her on Twitter at&nbsp;@ines_ferre” data-reactid=”61″>Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tesla bull says long-term thesis ‘still intact,’ sees $7,000 price target by 2024” data-reactid=”62″>Tesla bull says long-term thesis ‘still intact,’ sees $7,000 price target by 2024

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tesla bear says stock is ‘detached from reality,’ predicts $87 price target” data-reactid=”63″>Tesla bear says stock is ‘detached from reality,’ predicts $87 price target

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Bearish Tesla analyst explains why shares could surge to $2,070” data-reactid=”64″>Bearish Tesla analyst explains why shares could surge to $2,070

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="NIO share price reflects ‘over-optimism’: Goldman” data-reactid=”65″>NIO share price reflects ‘over-optimism’: Goldman

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Why Nikola shares ‘look attractive’ long-term: JPMorgan analyst” data-reactid=”66″>Why Nikola shares ‘look attractive’ long-term: JPMorgan analyst

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Tesla’s most bullish analyst sets a Street-high price target of $2,322” data-reactid=”67″>Tesla’s most bullish analyst sets a Street-high price target of $2,322

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