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Markets were off their meds on Monday.
Stocks were up for most of the day yesterday, continuing their rally from last week despite increased coronavirus cases throughout the country. But we all know that good things won’t last in this environment.
California announced that it is scaling back its plans to re-open as things have gotten even worse in the golden state. And that’s when all hell broke loose.
The Dow gave up a 500 plus point gain following the news and finished up just 10 points. The S&P also briefly reached a positive position for the year before sinking back below.
Roller coaster ride
No company experienced the wild volatility of yesterday’s market more than Tesla. The electric-vehicle maker was continuing the rally after a big Friday, going up 16% on the day. But it didn’t last. The California news caused a sell-off, even for Tesla. It’s share price finished down 3% on the wild day.
That probably had something to do with the fact that day traders have been pouring money into Tesla. That’s right, according to Robinhood 40k of its users purchased TSLA during a four hour period on Monday, leading to the increase.
The bottom line…
Shareholders can’t be mad though. Tesla’s rise has been astronomical. The stock is up 56% in the past 10 days, so beggars can’t be choosers. A staggering 457k people own Tesla’s shares compared to 358k who own Amazon. But it’s only trading at 166 times earnings, so it’s not that speculative at all.
That increase has also carried some personal “W’s” for Elon Musk. Tesla’s $202B market value pushed Musk’s market value ahead of Warren Buffett. That’s right, the Oracle himself. But it didn’t last, as Tesla lost $55B in market value as the market sold off late in the day.
Water Cooler Talking Point(s)
💧 “I would kill to have gotten in at Tesla for $420.” (Ian, The Water Coolest HQ)
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