Investors Lose 30% Of Their Money Invested In Tesla Motors Inc (NASDAQ:TSLA)
Today, it seems all so farfetched, but all the hype and hoopla that surrounded the ever increasing valuation of the stock of Tesla Motors Inc (NASDAQ:TSLA) at the browsers till recently had to be seen to be believed. The rally in the stock was thought to be almost unstoppable with growth in the range of 267% over the trailing 12 months.
Share Price Melt Down
But those heady days of perpetual increase in its market value seems to have come to an abrupt albeit temporary end. In the past 5 days of trading the stock has shed a staggering 12.6% while in the past 30 days the loss extends to a hurting 29%. Thanks to the selloff, the market cap of this electric car maker has come down to $14 billion from its previous highs of above $20 billion market caps.
The melt down in the market value of the stock is a result of small number of its car’s catching fire leading to scare mongering that Tesla Motors Inc (NASDAQ:TSLA) electric cars were death trap on wheels. Dismissing the allegations, its combatant CEO and founder Elon Musk has released public statements to the effect that “the incidents of fire in his Model S electric cars were minuscule when compared to the fire incidents reported in gasoline powered cars”
This combative and aggressive stance is being sympathetically heard by industry experts and analysts, but has not been able to assuage the sudden loss of investor confidence in the company and its stock.
It has also not helped that the government agencies have jumped into the fray and have ordered a thorough review of the circumstances and cause of fire in the two instances where fire was reported in Tesla Motors Inc (NASDAQ:TSLA) late Model S electric cars. Analysts are also warning that the car maker’s sales numbers will take a hit due to the imbroglio.