Tesla shares extend losses on demand worries in China
Tesla Inc shares fell 8% on Tuesday after a Reuters report that Tesla was planning to run a reduced production schedule in January at its Shanghai plant sparked worries of a drop in demand in the... |…
The stock, which fell to its to lowest in more than two years, was the biggest drag on the benchmark S&P 500 index and the tech-heavy Nasdaq index. It has lost more than half its value since the start of October as investors worry that Twitter was taking much of Chief Executive Elon Musk's time while fretting about his stake sale in the electric-car maker. The world's most valuable automaker's production cuts at the Shanghai plant come amid a rising number of COVID-19 infections in the country.
"There's no question there are demand fears," Great Hill Capital Chairman Thomas Hayes said, citing a delivery forecast cut from Chinese rival Nio Inc in the key market. Hayes also added that Tesla's stock was facing a "perfect storm" of high-interest rates, tax loss selling and share sales by some funds that hold a significant amount of Tesla stock. Tax loss selling is when an investor sells an asset at a capital loss to lower or eliminate the capital gain realized by other investments, for income tax purposes.
Meanwhile, a Reuters analysis showed that prices of used Tesla cars were falling faster than those of other carmakers, weighing on demand for the company's new vehicles rolling off the assembly line. (Reporting by Akash Sriram in Bengaluru; Editing by Anil D'Silva)