Multinational automobile giant, Tesla Inc, suffered huge losses in stock markets yesterday as a large-scale sell-off of the shares pushed down stock prices. With a 492.96 billion dollar market capitalization, Tesla Inc is now below United Health in terms of market value.
As of now, Tesla is the 7th Largest American company with a market value of $494.61 billion. United Health Group based in Minnetonka, Minnesota is standing in 6th place with a market capitalization of $506.26 billion.
The electric vehicle manufacturing company owned by multi-billionaire Elon Musk has been under great pressure inside and outside stock markets for the past few months. Due to the supply chain crisis, prolonged lockdowns in China and various business decisions of Elon Musk, Tesla Inc stocks have been witnessing high volatility and a dip in stock values.
Stock market data suggests that the value of Tesla Inc stocks has decreased by nearly 40 per cent since the end of September 2022. This free-fall in stocks of the automobile giant comes at a time when S&P 500 Index rose by nearly 12 per cent. S&P 500 Index is the stock index of the top 500 companies listed on various Exchanges in the United States.
The stock closed down 4.1 per cent at $160.95 in New York, recouping some losses from earlier in the session. The shares fell as much as 6.5 per cent on Tuesday, taking its market capitalization below $500 billion.
Tesla Inc which crossed a 500 billion dollar market capitalization in November 2020, broke into a trillion-dollar club in October 2021. This was a time when investors were actively searching for tech stocks to park their funds. Due to global trends, tech stocks in general were witnessing huge spikes in stock prices during that time.
As months progressed, the attraction of Tesla Inc as a profitable stock diminished in the stock market due to various reasons. The beginning of the Russian special military operation in Ukraine and the following spike in consumer price indexes across the world put more pressure on the supply chain processes and raw materials.
Production disruptions in China, mainly due to localized lockdowns imposed by the government to curb COVID-19, and the inability of the company to project proper business growth in the EV sector, made Tesla Inc a “selling stock” for investors. The decision of Tesla Inc CEO Elon Musk to purchase the social networking company, Twitter, controversies and lawsuits related to that deal all had negative impacts on the stocks of Tesla Inc.
