The Story Behind The Tesla Stock Price Drop

Tesla Stock Price Drop

Tesla is considered to be one of the biggest tech companies in the world. 

Its stock fell hard on January 24, resulting in chaos for investors and shareholders.

Tesla shares went down to a low of 9%, trading at $851.47 on Monday. The company did manage to bounce back, rising up to about $930 after the 1.5% drop.

Tesla was not the only firm to suffer from the unstable market, although it fared much worse than many of its competitors and counterparts.

The Current State of the Market

While Tesla’s shares were a severe cause for concern, it was not the only company to suffer at the hands of the turbulent speculative electronic vehicle market.

As of today, Tesla is officially down over 25% from its previous January highs, and had the steep drop not fallen under control, things may have been much worse.

As it stands, Tesla stock is down 6.6.%, after recovering from the previous 10% drop on Monday.

In comparison, RIvan shares fell to 10.1%, and Nikola’s to 7%.

How And Why Did Stock Price Suffer?

Tesla has a lot riding on it after breaking records in the fourth quarter of the last financial year.

Shares started at a jaw-dropping 13.5% at the start of the new year, a feat most companies could only dream of.

The company also added to its list of achievements by delivering approximately 309,000 vehicles in the fourth quarter, surpassing the expectation of a mere 270,000.

Despite the success, economics always comes into play to shake things up.

Rising interest rates, inflation, and other macroeconomic concerns have an adverse effect on rapidly rising stock prices.

From the trading session to the crash on Monday, overall shares are down a whopping 22%, with the Nasdaq Composite being off by about 12%.

However, nothing seems to be particularly wrong with the market as a whole.

Rising growth rates merely affect stock prices more than moderate growth, and growing companies are able to generate more of their cash flow further in the future.

This impending cash flow will be deemed less valuable in the long run, especially once it is discounted at a much higher rate.

Tesla’s stock is essentially monitored by traders who analyze market patterns to determine the fate of the company’s stock and stock prices.

The company appeared to be in trouble after shares fell below both the 50 and 100-day moving averages it had been enjoying just last week.

While a stock can find support at one moving average, trouble can brew when other shares begin experiencing unprecedented growth.

What Does The Future Hold?

With Tesla now resting relatively easy at around $930 per share, the next benchmark to hit on the road to recovery is the 200-day average of $810 per share.

The moving average will once again be closely tracked, making sure the company can avoid the worst-case scenario over the next couple of days.

Provided shares can break through the $960 100-day average; the stock price should shoot back up to over $1000 for each Tesla stock share.

Tesla may be in some trouble after recent p[redictions that its Cybertruck production will be delayed, as many have taken notice of the fact that production cost estimations have been removed from the company’s website.

Rivan may be the one to beat in terms of the electric pickup truck, with established firms like General Motors and Ford adding even more competition to the market.

The primary question investors are asking is how influential Tesla can continue to be in today’s market.

The company is set to report its 2021 results on January 26, and investors are expected to receive confirmation that Elon Musk’s company gained a total of over $50 million worth of revenue in 2021.

It has been reported that net revenue from January to September 2021 was around $3.2 million, but the financial world has yet to hear about how the company fared towards the end of the year.

Despite the recent drop in share price, Tesla will still be able to boast about a market cap of almost $900 billion and is not likely to lose its reputation and status anytime soon.

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