Tesla’s stock price plunged 36% from its high point in January, raising concerns over a bubble collapse.
Tesla closed at $563 on the Nasdaq on the 8th (local time), down 5.8 percent from the previous day. This is about 36% lower than the high price on January 26. Tesla’s share price is also the lowest in three months since it hit $567 on November 30 last year.
Tesla’s market capitalization also fell from $824 billion on January 26 to nearly $300 billion. Shortly after the inclusion of the S&P 500 index in December last year, it overtook Facebook on a market capitalization basis, but fell behind Facebook again on the same day due to a series of declines in stock prices.
Behind Tesla’s stock price plunged
Analysts say the decline in Tesla’s stock price is due to investors’ high-valued selling of technology stocks following the recent surge in U.S. long-term government bond rates and inflation concerns. As inflation concerns increased, the Nasdaq index hit an all-time high on the 12th of last month. Followed by falling stock prices of U.S. tech and other growth stocks. The Nasdaq recorded 12,609.16 points, down 2.4 percent from March 12.
Nevertheless, Tesla’s decline is known to be particularly noticeable among technology stocks. Apple and Amazon, which are major technology companies, fell 13% and 9%, respectively, compared to the 12th of last month. But Tesla fell 29%.
In addition, the fact that competition for electric vehicles in the automotive industry is getting fiercer seems to have contributed to Tesla’s decline. According to Morgan Stanley’s February U.S. auto market analysis report released on the 3rd, Tesla’s market share in the U.S. in February was 69 percent. It is down 12 percentage points from the previous year (81 percent).
Tesla is also lagging behind Volkswagen and other traditional strong players in European electric vehicle markets. Tesla, which took the first place in the European electric vehicle market (31%) in 2019. It fell to 13% last year, ranking fourth after Volkswagen, Renault Nissan Group and Mitsubishi.
As a result, Tesla’s target stock price will also drop sharply. According to Investor Business Daily, an investment media outlet, most analysts expect Tesla’s stock price outlook to rise only about 1% in the next 12 months.
