Sharp drop in Tesla shares: Down 50 percent from record high!
Tesla shares recorded a 10 percent drop. The company's stock has fallen 50 percent from its peak levels.
According to a report by Bloomberg HT, Tesla shares extended their losses in pre-market trading on the first day of the new week, falling below the price that Commerce Secretary Howard Lutnick had predicted would never be seen again.
The company's shares fell more than 10 percent to $214.80. In an interview with Fox News on March 19, Lutnick had told viewers they should buy the stock, stating, “it will never be this cheap again.”
Tesla CEO Elon Musk told Tesla employees the following day that they should hold onto their shares.
With the latest decline, Tesla shares have fallen 50 percent from the record level reached in mid-December. Following Trump's election victory, the stock had rallied, and many had expected this to be a positive development for the company given Musk's proximity to the president. Instead, Musk's involvement in political controversies both in the U.S. and abroad has alienated consumers and encouraged boycotts against the company.
Wedbush Securities Analyst Daniel Ives, one of Tesla's biggest bulls, cut his price target on the stock by more than 40 percent, citing Trump's trade policies and the brand crisis created by Musk.
In a note to clients on Sunday, Ives said, “Tariffs in their current form will disrupt Tesla, the overall supply chain, and its global footprint, which has been a clear advantage for years against rising competitors like BYD.”
According to Ives, the bigger concern is Tesla's position in China.
“It will be hard to underestimate the backlash that Trump's tariff policies and Musk's relationship will create in China, and this situation will further drive Chinese consumers to buy domestic vehicles like BYD, Nio, Xpeng, and others,” Ives wrote.
News Source: 12punto
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