Tesla Inc. shares extended their declines on Monday and were on track to close in a bear market as a result of a rout in growth stocks and regulators opened an investigation into the electric-vehicle company, which sent the stock lower for a fourth trading session.
The electric vehicle maker's stock fell by as much as 6.4 per cent to US $950.50 in morning trading in New York, pushing its market value below the US $1 trillion threshold for the first time since October. That is a 23 per cent decline from the record high of US $1,229. On November 4, 91 touched barely a month back. A stock is said to enter a bear market when it falls 20 per cent on a closing basis. This video hasn't loaded. We apologize for it.
You can see other videos from our team here. Try refreshing your browser, or Tesla, on track to enter bear market after the SEC investigation.
The Securities and Exchange Commission opened an investigation into Tesla over whistleblower claims on solar panel defects, according to a letter from the agency. The fears of the Omicron variant of the coronavirus and a hawkish message from Federal Reserve Chair Jerome Powell gripped markets, which has led to a pullback of Tesla shares over the past week. These factors weighed heavily on technology stocks and the so-called momentum names. The company s Chief Executive Officer Elon Musk, who sold more than US $10 billion worth of stock, has been a drag on investor sentiment, as a result of a steady offloading of shares.
Given Musk still has a way to sell 10 per cent of his stake — as discussed in a Twitter poll early November — Tesla shares may slide some more in the coming weeks. Despite this latest weakness, Tesla shares are up 39 per cent this year, compared to a 22 per cent increase in the S&P 500 Index. The Tesla-financial complex of how carmaker gained influence over the markets Most of the gains came from a surge in October after a rush of positive news - including strong results for the third quarter and a big order from Hertz Global Holdings Inc. The other prominent EV startups that have seen their share prices go up in recent weeks were trading lower on Monday. Newly public Rivian Automotive Inc. dropped by 4.2 percent, while Lucid Group Inc. fell 19 percent after it disclosed it received a subpoena from the SEC on Friday.