Why Tesla Shares Suddenly Dropped & Why Investors Shouldn’t Be Worried

Read The Full Article On: Screenrant

Electric vehicle company Tesla just suffered its worst-performing day on the U.S. stock market since it went public a decade ago. Shareholders around the world saw a major 21% loss in Tesla stock value, which has had buyers understandably shocked and concerned about the company’s future viability.

Tesla is best-known for its eccentric founder Elon Musk and its fleet of electric vehicles, as well as Musk’s tendency to tweet shocking or opinionated messages. The company’s Model 3 EV automobile has achieved the status of one of the world’s all-time best-selling plug-in EVs. Over 500,000 have been delivered to owners all around the world as of March 2020, according to CleanTechnica.

On Tuesday, September 8, Tesla stocks lost their value after Standard & Poor’s opted out of adding them to the index of the biggest 500 U.S. stocks on the market. This move would have required those who follow the major portfolio to purchase more shares, which had previously seen the rise in value of Tesla stocks over the past few months. However, S&P Indexes opted instead to add virtual storefront Etsy, pharmaceutical developer Catalent, and industrial robotics company Teradyne to the mix.

Tesla Stocks Have Plummeted, But It Isn’t Cause For Alarm

Despite the fact Tesla stocks lost their value, there isn’t cause for alarm for those invested in the company’s profitability threshold. Though there was the massive 21% decline, Tesla shares have summarily risen in value over the past year. Investors have seen an overall gain to the tune of 295%. Though the stock was down 34% just recently, it ended up gaining a record high close on the market as of August 31. Tesla announced a stock split that just took place on the same day. This 21% fall is a lesser concern in the grand scheme of things when it comes to Tesla. As time has proven in the past, the company will continue to bounce back, even when it’s battered by uncertainty and perceived concerns about its value.

On the same day the company stock took a hit, Tesla announced it sold $5 billion worth of its shares the previous week. Tesla has had success selling off some of its stock in the past, and this is a move that will likely reassure investors there’s little to be concerned about, as the EV manufacturer has been here before. Just in February 2020 alone, Tesla was able to recover $2.3 billion by selling 3 billion shares at an average price of $151.60 a share. Though the company appears to have hit another rough patch, it will likely recover just fine.

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