By Esha Dey and Siddharth PhilipTesla Inc. shares wiped out their year-to-date gains Tuesday and traded below the level where they were when the electric-carmaker entered the S&P 500 Index in December.
The stock dropped as much as 13% to $619 in New York, its biggest intraday decline since Sept. 8, before paring much of the loss to trade down 1% at 10:55 a.m. The stock was down 31% from its Jan. 25 record intraday high at its lowest point on Tuesday.
Tesla’s early-week decline amid a wider market selloff was fueled in part by Chief Executive Officer Elon Musk’s comments over the weekend that the prices of Bitcoin and smaller rival Ether “do seem high.”
“Tesla is an EV play entering the golden age of EVs and there is a lingering worry that the Bitcoin sideshow could overshadow the overall EV growth story playing out for Tesla in 2021 and beyond,” Wedbush analyst Daniel Ives wrote in a note to clients.
The concerns over the value of the cryptocurrency helped erase some of Bitcoin’s gains, which had rocketed to new highs after Tesla announced two weeks ago it added $1.5 billion in Bitcoin to its balance sheet. The cryptocurrency fell as much as 18% to $45,000 Tuesday.
However, there are other recent factors that may also be taking the shine off Tesla’s valuation…