Tesla to follow BTC – down the drain?


Yesterday we were reporting on unprecedented drops in the value of Bitcoin.

Today it looks like Tesla’s evaluation might be following suit, at least to some degree.

Analysts are citing an 8 percent correction in the last market session, and other evidence that Tesla’s ticker price may be about to plunge along with Bitcoin prices based on the company’s notable $1.5 billion investment in the coin earlier this year.

As Tesla skyrocketed throughout 2020 and the tweets of its founder created major price fluctuations in other unrelated stocks, Elon Musk gained a reputation as something of a market maker. But as one of our sources said in yesterday’s coverage, stocks never go up without corrections forever, and many are thinking that it is now Tesla’s turn to get a haircut.

At Reuters, Julien Ponthus notes that investing in Bitcoin could hurt Tesla’s ESG rating environmental social and governance rating, also mentioning some indicators in the realm of the commentariat that could spell doom for Tesla, in the short term.

“Analysts at Barclays noted that there had been a drop of conversations about the electric car makers in the Reddit’s WallStreetBets forum, which could explain some of the loss of appetite for the stock,” Ponthus writes.

Lawrence Nga at Motley Fool has some more prosaic notions about why Tesla stock could topple from its current prices over $800 per share. Nga points out that Tesla is now trading 29 times above trailing sales. The author also lists potential problems for the company moving forward, including:

  • Fallout from the ongoing global recession
  • Escalations in the U.S.-China trade war
  • Production delays

“Tesla is a one-of-a-kind company,” Nga writes, tempering praise with caution. “With Musk at the helm, Tesla has positioned itself for leadership in electric cars, renewable energy, and other game-changing industries. But a great company is not necessarily a great investment. We all know that overpaying for a stock can turn a great company into a bad investment. Tesla — despite its visionary leader and incredible potential — is a shaky investment proposition because investors have priced in all of the roses, and none of the risks.”

Keep an eye on TSLA!