Shares of Tesla Inc closed lower for a fifth consecutive session on Monday, caught in a tech-led selloff that has wiped more than $277 billion off the company’s market value over the last month.
High-flying tech stocks, which powered the market’s rebound from the pandemic lows in March last year, have been hit by a one-two punch of rising yields and investors shifting funds to sectors poised to benefit from a recovery in the global economy aided by accelerated rollouts of COVID-19 vaccines.
“People went into this stock super aggressively to drive it from $40 to $900, and that means will usually come out just as fast,” said Roth Capital Partners analyst Craig Irwin.
“It was obviously overdone both at $200, and I would say well overdone at $900. Retail often doesn’t sell as fast as the institutions, so the correction could last longer than for other tech stocks.”
The tech-heavy Nasdaq index has declined more than 10.5% over the last three weeks. Tesla’s shares fell as much as 6.5% on Monday, while peers Nio Inc and Li Auto closed down 7.6% and 5.0% respectively.
The broader auto industry has been pressured by a global semiconductor chip shortage, which has caused a major delay in manufacturing activities and forced many companies to scale down production.
In late February, Tesla Chief Executive Officer Elon Musk said the company’s Fremont, California plant was shut down for two days due to “parts shortages”.
The weeks-long selloff has reduced Musk’s wealth by more than $49 billion as of Friday, according to Reuters calculations.
Reporting by Munsif Vengattil and Akanksha Rana in Bengaluru; Editing by Sriraj Kalluvila and Devika Syamnath