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Friday, August 12, 2022

Tesla nears bear-market territory after prolonged tumble

The stock recovered a bit to close down 1.9 percent at $1,013.39, marking a nearly 18 percent decline from its November 4 high.

Tesla Inc. shares are nearing bear-market territory after tumbling over the past week as Chief Executive Officer Elon Musk sold a chunk of his stock in the electric vehicle maker, and hinted that he may sell more.

The shares dropped as much as 5.3% on Monday in New York, retreating more than 20% from the record high of $1,229.91 touched on Nov. 4. The stock then recovered a bit to close down 1.9% at $1,013.39, marking a nearly 18% decline from the high. A stock enters a bear market when it falls 20% on a closing basis.

The slump was triggered by a Twitter poll from Musk asking his followers whether he should sell some of his shares in the company, followed by news of him unloading stock worth about $7 billion.

Shares may have faced some additional pressure from the blockbuster trading debut of Amazon.com Inc. and Ford Motor Co.-backed electric-truck maker Rivian Automotive Inc. last week, which some said could become a legitimate option for institutional investors who previously only had Tesla to play the EV space. Shares in Rivian rose another 15% Monday, bringing their total gain since their IPO to 91%.

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