Tesla has lost a quarter of a trillion in market capitalization in the past month as stocks tumble


Shares of Tesla Inc. fell Monday for the fifth straight session, part of a selloff that has taken more than a quarter of a trillion dollars out of the company’s market capitalization in just over a month.

Tesla stock TSLA,
-5.84%
It has sunk 21% in the last five trading days and is down 34% in the last month. Since peaking on January 26 with a market capitalization of around $ 850 billion, Tesla has lost about $ 277 billion in valuation.

Tesla has also entered its third bear market, defined as a drop of 20% or more from a recent high in the past year, after strong sell-offs in September and March 2020. Still, the automaker’s volatile shares electricity have risen more than 360% in the last 12 months.

Tech stocks in general have been hit hard in recent weeks, with the Nasdaq Composite COMP,
-2.41%
down 9% in the last month. Electric vehicle companies, in particular, have been down a lot. Among Tesla’s rivals, Nio Inc. NIO,
-7.61%
has fallen 38% over the last month, while Nikola Corp. NKLA,
-1.88%
is down 38% and Li Auto Inc. LI,
-5.03%
has a 30% discount.

One reason is the global chip shortage that has hit automakers’ supply lines. In February, Tesla briefly closed its factory in Fremont, California, which CEO Elon Musk attributed to a “parts shortage.” CNet reported Monday that customers purchasing Model 3 and Model Y vehicles face a delay of months for delivery.

Rising interest rates have also taken their toll, as high-growth companies like Tesla rely on future cash, which devalues ​​as rates rise. An estimate from Barron’s found that, as a admittedly simplified example, every 1% increase in interest rates hurts Tesla’s value by roughly $ 200 billion.

Watch: Tesla has craters. This is what interest rates hurt

Tesla shares closed at about $ 568 a share on Monday, below the average price target of $ 616 from analysts tracked by FactSet.

ARK Investment founder Cathie Wood has said her firm will soon give a new target price for Tesla shares, but said 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.

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