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Tesla’s market value fell about $ 80 billion on Tuesday. The stock lost 21 percent after the automaker was surprisingly denied its expected inclusion in the S&P 500.
Index provider S&P Dow Jones gave preference to companies with significantly lower market value but more frequent quarterly earnings. Online fashion retailer Etsy, semiconductor maker Teradyne, and medical technology maker Catalent were included in the index.
Liquidation in the technology sector
However, the price loss can also be seen ahead of a broad sell-off in the tech sector: the US Dow Jones Standard Value Index closed 2.3 percent lower at 27,500 points. The high-tech Nasdaq lost 4.1 percent to 10,847 points. The broad S&P 500 lost 2.8 percent to 3,331 points.
As a result, shares in Amazon, Facebook, Netflix, and Google’s parent Alphabet fell in high single digits at times. The Nasdaq US Tech Index had already slumped 3.3 percent last week, ending the tech rally on Wall Street.
Here a parallel can be drawn with the assessment of Microsoft in 2000, says Charlie Bobrinskoy of Ariel Investment. Even then, Microsoft was a fantastic company, but it was simply rated too high, he told CNBC. “These are all wonderful companies, but they just aren’t worth their share price,” Bobrinskoy said of Nasdaq stock.
But it’s premature to evoke the end of the tech rally, said stock trader Dennis Dick of the brokerage firm Bright Trading. “It is still a healthy correction.”
Musk is losing 16 billion
However, the great loss had an immediate impact on the fortune of Tesla CEO Elon Musk. According to the Bloomberg news agency, Musk’s stock lost about $ 16 billion in value in one day, so his fortune is still $ 82 billion.
Price losses from the all-time high that Tesla hit a week ago after a stock split by more than $ 500 have now risen to nearly 30 percent. A few days of trading added up, Tesla’s market value plummeted by more than $ 130 billion.
On Tuesday, Tesla also announced that the company is receiving fresh money from investors. To do this, new shares worth five billion dollars will be issued.
Investors switch to Nikola
Investors moved from Tesla to Nikola within the battery vehicle industry. While Tesla shares tumbled, the stock rival’s shares soared more than 40 percent. At the same time, the latest correction in US stock exchanges continued after the long weekend.
Nikola’s papers were boosted on Tuesday by the entry of automaker General Motors (GM), which is grabbing eleven percent of Nikola’s shares and wants to profit from the maker’s technology in return. battery-powered commercial vehicles. Experts also called the alliance a possible attack on Tesla. Both parties are keen to turn the lucrative truck segment around with the first electric model.
Until now, Nikola and Tesla have rarely gotten in each other’s way: Nikola has his strengths in the truck segment, Tesla in the limousine business.
