The company’s shares closed down 9% on Thursday, bringing the loss since Monday closer to more than 18%, the steepest drop in 3 days since mid-March. The drop came amid a broader slide in high-flying tech stocks that led the Nasdaq 100 to its worst one-day loss since March.
The Elon Musk-led company has had an outstanding performance in the US stock market this year, increasing nearly 500% through Monday. The gain was helped by strong second-quarter results that also fueled speculation that Tesla would become part of the S&P 500 index. Its highly publicized “Battery Day” event, to be held later this month, may also have greater optimism, as many expect the company to introduce new technologies that day.
All of these developments, along with Musk’s cult following, have made Tesla a favorite with retail investors, occupying an almost permanent spot on online brokerage Robinhood’s hottest stocks list.
While it’s difficult to pin down the reason for this week’s hiatus in the face of Tesla’s previously unstoppable rally, some say it’s the law of gravity that is catching up, possibly with the help of news from the company’s largest shareholder. . of Musk reducing his bet as well. as the market slowly. digest Tesla’s plan to sell up to $ 5 billion in stock. The share sale was announced Tuesday and could be the company’s largest share commission if it sells at least $ 2.34 billion under the plan.
Whatever the trigger, the stock fell as much as 10% in New York, roughly 19% from the closing peak of $ 498.32 that touched on August 31. A stock is considered correcting when it falls more than 10% from the last high. , while a 20% drop would put you in a bear market.
