A general selloff in the US stock market, which has disproportionately impacted growth and technology companies, has contributed to a drop in the price of Tesla Inc. (NASDAQ: TSLA) shares of around 50% from their all-time high.
Last week trading ended with the electric vehicle manufacturer’s shares falling 7.6% to $204.99, bringing the company’s total market valuation to $642 billion. The stock’s record closing high of $409.97 on November 4, 2021 has been reduced by approximately 50%.
The fall occurs in the midst of a wider collapse in the markets, as investors are thrown into disarray by the prospect of an economic downturn. These investors were already preparing themselves for the impact of increased inflation and higher interest rates when the plunge occurred. The majority of the selling pressure has been concentrated on riskier growth firms with wealthy valuations.
The following are some of Tesla’s many problems: The delivery of vehicles suffered during the third quarter as a result of problems with logistics, and some analysts have cautioned that the increasing prices of the company’s automobiles may potentially weigh on demand at some point in the future.
In addition to this, the Tesla factory located in Shanghai has experienced setbacks in production as a result of the citywide Covid-19 lockdowns. In addition, the corporation has had to contend with a lack of available supplies and an increase in the price of raw materials, much like practically every other carmaker in the world.
The highly publicized attempt by Chief Executive Elon Musk to first buy Twitter Inc., then to walk away from the transaction and buy it again, has also been noted as a drag on the price. This is owing to fears that the company’s leader is spreading himself too thin between numerous tough undertakings.