Tesla’s skyrocketing stock prices give way to even more skyrocketing.
Almost all of this week, markets have fallen – amid disturbing news about the spread of coronavirus outside of China. For some, the fall was not critical, and some companies suffered more. Among the latter are Tesla.
The inexplicable growth of Tesla shares at the end of last year and at the beginning of the current led to almost a twofold increase in market capitalization in a very short time. But in an even shorter period – just a week – the value of the shares fell by 25% (from 901 US dollars on Monday February 24 to 667.99 US dollars on Friday February 28), and market capitalization fell by about 40 billion dollars: the beginning of the week, it was estimated at 163.389 billion dollars, at the end – already 123.17 billion dollars. If the fall continues next week, Tesla risks losing Volkswagen AG the second-largest car company in terms of market value.
Against the backdrop of a general market decline, the decline in Tesla shares is striking only against the background of their too rapid growth at the end of last and the beginning of this year. Nevertheless, it is possible that specifically in this case, pessimism of investors is less related to the situation around the coronavirus – after all, the general news agenda regarding Tesla is positive: the company is still building a plant near Berlin and has already launched mass production of the Model Y crossover ahead of schedule. Therefore, it may well be that the time has come for correction. In this case, the subsequent rebound in the value of the shares may turn out to be very moderate, and if the market capitalization of the company unfolds its vector and continues to grow, then slowly.