A third steep decline in 2021 and the highest daily surge of the last 12 months — Tesla stocks can, indeed, attract attention. Let's find out what's provoked such a roller coaster.
Tesla's capitalization dropped by almost 300 billion USD
On March 8th, the stock price of Tesla (NASDAQ: TSLA) dropped by 5.84% from 597.95 to 563 USD. According to Reuters, this brought the capitalization of Elon Musk's company down by almost 300 billion USD. If we compare it to the high in January, the decline will amount to 35%! Yes, a more than one-third decline!
Note that this was a fifth session in a row ending in a decrease in the stock price. All in all, the stocks of the US electric carmaker became 21.63% cheaper.
Why are Tesla stocks falling?
Experts say that during the last couple of weeks, not only Tesla stocks have been falling — many other major representatives of the tech sector also suffered.
The situation was provoked by certain agitation around the US public debt papers. They say that the 10-year treasury bonds going cheaper but more profitable made investors sell costly stocks.
The decline of Tesla stocks can also be explained by the fact that investors got tired of waiting for the long-promised increase in electric car production volume. At that point, the head of the company wrote on Twitter that the update of Cybertruck would not happen until Q2.
Record growth overnight
However, nothing will be said if I just say that on March 9th the situation changed dramatically. During a trading session, the stock price of the carmaker leaped up by 19.64% from 563 to 673.58 USD. The capitalization of the company reached 646.54 billion USD. This was the most impressive overnight growth of Tesla stocks since February 3rd, 2020.
Analysts say that the growth can be explained by an increase in the sales volumes of Tesla electric cars in China. According to the CPCA, last month there were 18,318 electric cars sold, while a month before — 15,484.
Wall Street Journal explains the growth of Tesla stocks by a negative trend in the whole tech sector changing for a positive one. As for Reuters, they say many analysts have changed their recommendations to "go and buy" and have lifted the target price.
What's happened to the tech sector?
On Tuesday, the Nasdaq Composite index demonstrated the most large-scale growth of the last 4 months. It grew by 464.66 points (3.69%), reaching 13073.82 points. Other US stock indices also grew: the Dow Jones Industrial Average — by 0.1%, S&P 500 — by 1.42%.
The following stocks grew noticeably as well: GameStop (NYSE: GME) — by 26.94%, Nvidia (NASDAQ: NVDA) — by 8%, PayPal (NASDAQ: PYPL) — by 6.9%, Apple (NASDAQ: AAPL) — by 4.1%, Amazon (NASDAQ: AMZN) — by 3.8%.
The stocks of Tesla can be called the most volatile ones among those of tech giants. Since a week ago, the quotations first dropped by 21.63% and then grew by 19.64%.
A week ago, when the COVID-19 pandemic knocked down global markets, the stocks of this carmaker shrunk by over 60%. In August — by 33%, but in January, they reached the high of 883.09 USD.
Do you think they will go on growing?
What else to read about Tesla on R Blog?
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