Tesla’s Market Cap Plummets Below $1 Trillion Thanks to Elon Musk
Tesla has gained a reputation for being one of the most prolific carmakers in the market in a relatively short time. Its success is also due to being a pioneer in the development of electric cars that other companies and industry experts consider to be the future of automotive engineering and development.
It was recently also recognized as one of the biggest companies in terms of market valuation but its market cap has fallen below the $1 trillion mark for the second time in four sessions.
A media report revealed that Tesla lost around $187 billion in market value over the past week, dropping by about 4.5 percent to $986 billion on Monday. The drop was brought to light via a Twitter spat between its CEO Elon Musk and US Senator Bernie Sanders after the latter asked people in the top-tier socio-economic class to pay their “fair share” of taxes.
The report detailed that the company recently sold stocks worth $6.9 billion, which upset the investors and caused the stock value to plummet as most of them began selling their stocks.
Commenting on the situation, the CEO of equity research firm Kalkine Group, Kunal Sawhney, shared the following observation:
Tesla shares have been sinking post the sale based on a Twitter poll last week. And Musk’s Sunday tweet deriding a senior politician may add pressure on the stock in the coming weeks. By offloading shares worth billions of dollars, Elon Musk is likely to accrue a tax bill of around $15 billion.
A few weeks ago, Tesla’s market valuation reached over $1 trillion, which was primarily due to its biggest fleet order by a car rental company called HERTZ. The order was reportedly for 100,000 Tesla Model 3 vehicles but the news was later dismissed by Musk.Advertisement
Strangely, it was noted that Musk did not deny the reports of the contract at the time, which has led netizens to speculate that it was an exploitative tactic on his part to drive the company’s market cap up.
Also, contrary to his claims, Hertz stated that the deliveries of Tesla vehicles have already begun. “We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles,” Hertz said in a statement.
Elon Musk is notorious for his eccentric ways, which also lends a good degree of fame and mystique to Tesla as well.