Tesla Inc.’s stock suffered a double whammy on Wednesday with news of lagging sales in China and a sharp selloff in technology and cryptocurrency assets.
Shares in the Elon Musk-led company dropped as much as 5.4% to $546.98, headed for the lowest close since November.
More than $300 billion has been wiped off the electric-vehicle maker’s market capitalization since late January, back when it was briefly bigger than social media giant Facebook Inc.
Even ardent Tesla bull Cathie Wood’s Ark Investment Management boosting its stake this week has failed to shore up sentiment.
A series of headwinds this month from crashes in China and Washington, data casting doubt over the company’s growth in China’s key auto market and a production delay at its Germany factory has eroded investor confidence.
Add to this the looming threat of competition from legacy car companies and the pressures from a global semiconductor shortage, and it’s not hard to see why Tesla is set to record the steepest monthly drop in its share price since May 2019.
The whiplash in cryptocurrency prices caused by Musk’s tweets this month has had a boomerang effect on Tesla shares as well, sending jitters across technology-related assets.
Earlier on Wednesday, Musk’s power over the currency was again on display after the Tesla chief indicated the company will be holding on to its Bitcoins despite the current volatility, prompting a rebound in the price of Bitcoin.
Tesla’s market capitalization currently hovers around $535 billion, a far cry from the $837 billion mark it touched on Jan. 26.
While Tesla shares have retreated nearly 38% from that high, Facebook has advanced more than 9% over the same period, and the S&P 500 Index has gained 6%.
Developments that last year helped propel the stock up almost 750%, such as a strong quarterly result and votes of confidence from major investors, are proving no match for the downward momentum in Tesla’s stock in 2021.