Tesla’s (TSLA.US) market cap falls below $500 billion for the first time in two years
Zhitong Finance APP has learned that the continued decline in Tesla (NASDAQ:) (TSLA.US) stock price prompted its valuation to close below the $500 billion mark for the first time since November 2020. US stocks closed down 2.6% Wednesday at US$156.80, with a market value of US$495 billion, down 55% this year. Problems with Tesla’s operations, including supply shortages, rising raw material costs and production outages, as well as Musk’s takeover of Twitter, weighed heavily on the stock. Due to the declining market value, Musk is no longer the richest man in the world.
The economic outlook for next year has also become less optimistic. At least two Wall Street analysts were cautious on Wednesday about Tesla and the EV industry in general. Goldman Sachs cut its supply and demand forecasts for Tesla to reflect “weak” demand, while Morgan Stanley also warned that Tesla’s braking system is having a serious impact on its demand for electric vehicles and lowered its forecasts for company’s US stock prices.
Tesla’s stock price was reportedly hit hard by concerns over a potential economic recession and interest rate hikes from the Federal Reserve, which triggered investor sentiment to sell high-risk and expensive stocks, leading to particular to a sharp sell-off in technology and growth assets.
Though Tesla shares have largely been down year-to-date, the pullback has intensified in recent months, with the stock down 41% since the end of September. That compares with an 11% increase in the S&P 500 over the same period and a 7% increase in the tech-heavy Nasdaq 100.
