Tesla Inc.’s shares fell on Monday for the fifth consecutive session, part of a sale that took more than a quarter of a trillion dollars from the company’s market capitalization in just over a month.
Tesla TSLA stock,
fell 21% in the last five trading days and fell 34% in the previous month. Since the peak on January 26, with a market capitalization of around $ 850 billion, Tesla has lost about $ 277 billion in valuation.
Tesla also entered its third bear market – defined as a 20% drop or more from a recent high – last year, after sharp sales in September and March 2020. Still, the carmaker’s volatile stocks trams have risen more than 360% in the past 12 months.
Technology stocks in general have been hit hard in recent weeks, with the Nasdaq Composite COMP,
down 9% last month. Electric vehicle companies, in particular, have fallen sharply. Among Tesla’s rivals, Nio Inc. NIO,
fell 38% last month, while Nikola Corp. NKLA,
fell 38%, and Li Auto Inc. LI,
is out of 30%.
One reason is the global chip shortage that has affected automakers’ supply lines. In February, Tesla briefly closed its plant in Fremont, California, which CEO Elon Musk attributed to the “missing parts”. CNet reported on Monday that customers who buy Model 3 and Model Y vehicles face a months-long delay in delivery.
The rise in interest rates has also affected, as high-growth companies like Tesla depend on future cash, which is devalued as rates rise. An estimate by Barron found that, as an admittedly simplified example, each 1% increase in interest rates undermines Tesla’s value by about $ 200 billion.
To see: Tesla is creating craters. That’s how much interest rates hurt
Tesla shares closed Monday at around $ 568, below the average target price of $ 616 by analysts monitored by FactSet.
Cathie Wood, founder of ARK Investment, said her company will soon set a new price target for Tesla’s shares, but she said on Monday that she is still optimistic about the company.
“Our confidence in Tesla has increased for a number of reasons,” Wood said in an interview on CNBC’s Closing Bell, citing Tesla’s market share and progress in autonomous driving.