The electrified movement in Tesla’s stock price (TSLA) has shorted out.
Tesla shares tumbled nearly 6% to $ 672 in pre-market trading on Tuesday, continuing a loss that began Monday. At current pre-market price levels, Tesla shares are down about 15% to start the week. And at $ 672 per share, Tesla shares have now fallen below the $ 695 price level with which the company entered the S&P 500 on December 21, 2020, according to data from Yahoo Finance Premium. The stock is up 1.3% for the year, behind the S&P 500’s 3.2% gain. The stock was up about 695% in 2020.
It’s not too hard to see why Tesla’s stock has come under great pressure.
First off, Tesla CEO Elon Musk tweeted on Saturday that the price of bitcoin “seemed too high.” That’s unlikely what the Tesla bulls wanted to hear from their supreme leader. Remember that earlier this month, Tesla said that it had bought $ 1.5 billion worth of bitcoins. If Musk believes that bitcoin has hit a short-term high, he could risk Tesla’s investment in bitcoin and, by extension, its market valuation.
Bitcoin (BTC-USD) prices have tumbled below $ 50,000 following Musk’s comments. At around $ 46,000 currently, bitcoin prices are almost 20% off from their 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 that speed because the rest of the industry is moving forward in a big way,” Zipse said at a conference, Bloomberg reported.
The comments essentially call into question Tesla’s long-term competitive position as more established vehicle manufacturers, such as BMW, enter the EV markets.
The Tesla sell-off has caught the attention of Dan Ives of Wedbush Securities.
“It has been a number of factors that have contributed to this red tape for Tesla. First, Tesla stopping sales of its lower priced Model Y, coupled with continued price cuts, has raised concerns about the street demand. Up to this point, we never considered this version of the Model Y as moving the needle and continued price cuts is part of Tesla’s overall strategy to stimulate demand. Second, the Bitcoin sell-off has been attached to the Tesla story as now, in the eyes of the street, Bitcoin and Tesla are attached to the hip, “Ives told Yahoo Finance.
Brian sozzi is a general editor and anchor in Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and in LinkedIn.
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