Tesla drops as much as 13%, turns negative for the year


Elon Musk, Tesla CEO, speaks during the launch of the new Tesla Model Y on March 14, 2019 in Hawthorne, California.

Frederic J. Brown | AFP | Getty Images

Tesla’s recent decline accelerated Tuesday as investors turned away from soaring tech names.

The electric vehicle maker’s shares fell as much as 13% – the stock’s worst day since September – before making up for most of those losses. At 10:30 a.m. on Wall Street, stocks fell 3%.

Tesla was down 8.55% on Monday and the stock is now down more than 15% for the week. With Tuesday’s losses, Tesla turned negative for 2021.

The automaker is the figurehead for disruptive tech stocks that investors favored amid the depths of the pandemic. The tech sector led the market out of the Covid-induced router last year. However, the prospect of new stimulus measures and a widespread introduction of vaccines has recently made rundown and cyclical sectors more attractive to investors.

Tesla is on track for its third straight week of losses. For the first time since November, the stock fell below its 50-day moving average. Moving averages are technical indicators used to determine momentum.

The company is now also exposed to the volatility of bitcoin prices after purchasing $ 1.5 billion of the cryptocurrency. According to data from Coin Metrics, Bitcoin is down 10% in the past 24 hours and dropped below $ 50,000 on Tuesday.

Tesla shares are falling from their record high

Tesla finished 2020 as one of the best performing stocks of the year. That momentum continued into 2021 when the stock hit an all-time high on January 25. However, since that high water mark, the stock has fallen 28%.

The company isn’t the only tech name that has come under selling pressure in recent sessions.

On Monday, the tech-heavy Nasdaq Composite fell 2.5% while Apple, Amazon and Microsoft all fell more than 2%. The Nasdaq contributed to those losses on Tuesday, falling 1.7%.

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Robert Dunfee