Musk's 'Stake Sale Announcement' Causes Tesla Stock to Plunge 16% Over Two Days

Market Cap Drops by 205 Trillion Won... Largest Decline in 14 Months

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Tesla CEO Elon Musk's announcement of his intention to sell 10% of his Tesla shares caused Tesla's stock price to plunge nearly 16%. Previously, Tesla's stock price had surged past a market capitalization of $1 trillion, reaching the so-called 'Cheonibaeng Tesla' level, but it has now slipped back to 'Cheonsa Tesla'.

On the 9th (local time), after the market closed on the US Nasdaq, Tesla's stock price recorded $1,023, down 12% from the previous trading day.

Tesla's stock price had also fallen 4.8% the day before. After closing at $1,221 on the 5th, it dropped more than 16% over two days on the 8th and 9th, retreating back to $1,000.

Bloomberg reported on Tesla's stock plunge, stating, "A market capitalization of $175 billion (approximately 205 trillion KRW) evaporated over two days," and added, "The combined decline over two days is the largest drop in the past 14 months."

This decline in Tesla's stock price came shortly after CEO Musk announced his intention to sell part of his Tesla shares.

Earlier, on the 7th, Musk had conducted a Twitter poll asking whether he should sell 10% of his Tesla shares, and after a majority voted in favor, he stated, "I will abide by the results."

Matt Potillo, an analyst at US investment bank Tudor Pickering, said, "Even from a long-term perspective, Tesla's stock price is highly overvalued," and added, "Musk's announcement of selling shares gave investors a reason to sell."

There is also analysis that the intensifying competition in autonomous vehicles with other companies has influenced Tesla's stock price decline.

Seth Goldstein, an analyst at investment bank Morningstar, said, "Nvidia's announcement of new autonomous driving technology on that day was one of the factors behind the selling pressure on Tesla's stock," and predicted, "If Nvidia's technology becomes widely commercialized, Tesla will not be able to avoid heated competition."

Previously, Tesla's stock price had surged after its third-quarter earnings exceeded expectations and it was reported to have signed a vehicle supply contract with Hertz, the largest car rental company in the US. Tesla broke its all-time high at the end of last month, surpassing a market capitalization of $1 trillion for the first time.

This content was produced with the assistance of AI translation services.