(Yahoo Finance) – Tesla (TSLA) shares are tanking today. The stock sank as low as 19% during Tuesday morning’s session. By midday, shares were trading down about 15%.
“If you’re a trader, you have to be able to stomach that volatility,” Ari Wald, Oppenheimer senior analyst, told Yahoo Finance’s The First Trade.
The stock is down about 22% over the last three sessions, and about 28% lower from its closing high on August 31.
“This is a stock that had a massive down-turn, yet again, it’s still above its 50-day average,” noted Wald.
The electric vehicle maker was sidelined for inclusion in the S&P 500 (^GSPC), disappointing investors who had speculated the company would be added after posting a fourth straight quarter of GAAP profitability in July.
Meanwhile on Tuesday, Nikola (NKLA) and GM (GM) announced a tie-up to make the electric truck startup’s Badger, which will take on Tesla’s Cybertruck.
Also on Tuesday, Tesla disclosed it completed its sale of $5 billion of common shares. The company had announced the planned offering a week ago saying it would sell the shares “from time to time.” Since that announcement, the stock has entered into correction territory, despite a recent price target increase from BofA.
The stock was also under pressure last week after investment firm Baillie Gifford disclosed cutting its position in the electric vehicle maker citing portfolio restrictions.
On August 31st, shares began trading on a 5-for-1, split-adjusted basis, surging 12% that day.
The stock split, the first in the company’s history, was announced earlier in August when shares were trading below $1,400. The stock soared in the weeks that followed to close at $2,213.40 on the Friday prior to the split.
Some investors had speculated the company would be added to the index after posting a fourth straight quarter of GAAP profits during its latest quarterly results announced in July.
Analysts have been racing to re-rate the stock following its massive rally this year. One analyst called the stock’s valuation “mind-boggling.”