The electrified movement in Tesla’s share price (TSLA) was short-circuited.
Tesla’s shares plunged nearly 6% to $ 672 in the pre-market on Tuesday, continuing the defeat that started on Monday. With current pre-market price levels, Tesla’s shares fell about 15% earlier in the week. And at $ 672 per share, Tesla’s shares have now fallen below the $ 695 price level the company entered the S&P 500 on December 21, 2020, according to data from Yahoo Finance Premium. The shares rose 1.3% in the year, lagging the 3.2% gain of the S&P 500. The shares rose about 695% in 2020.
It is not too difficult to see why Tesla’s shares are under strong pressure.
First, Tesla CEO Elon Musk tweeted on Saturday that the price of bitcoin “seemed too high”. It is unlikely what Tesla’s bulls wanted to hear from their supreme leader. Remember that earlier this month, Tesla said it bought $ 1.5 billion in bitcoin. If Musk thinks bitcoin has peaked in the short term, he could risk Tesla’s investment in bitcoin and, by extension, its valuation in the stock market.
Bitcoin (BTC-USD) prices fell below $ 50,000 after Musk’s comments. At around $ 46,000 today, bitcoin prices are almost 20% below the record high of around $ 58,000 on February 21.
Meanwhile, on Tuesday, BMW CEO Oliver Zipse dealt a rare public blow to Tesla.
“It will not be easy for Tesla to continue at this speed because the rest of the industry is moving forward,” Zipse said at a conference, Bloomberg said.
The comments essentially question Tesla’s long-term competitive position as more established vehicle manufacturers – such as BMW – enter the electric vehicle markets.
The liquidation at Tesla caught the attention of Dan Ives of Wedbush Securities.
“It has been a number of factors that contribute to this bureaucracy for Tesla. First, Tesla interrupting sales of its lower-priced Y model along with continued price cuts have led to concerns about street demand. Until this point, we’ve never seen this version of Model Y as moving the needle and continuing to cut prices is part of Tesla’s overall strategy to stimulate demand. Second, the sale of Bitcoin has been linked to Tesla’s story, as now, to eyes of the street, Bitcoin and Tesla are stuck at the waist, “Ives told Yahoo Finance.
Brian Sozzi is a general editor and anchor on Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi is at LinkedIn.
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