Tesla Stock Was Soaring. Then $55 Billion Got Knocked From Its Value. - Barron's

Monday’s reversal was the largest swing from positive to negative for Tesla since June 30, 2010, a day after its IPO.

Photograph by Andreas Dress

After a wild Monday, Tesla stock shed about $55 billion from its intraday peak and closed down 3.1%, after being up at one point more than 16%. The slide not only hurt the electric-vehicle maker, it created a SPAC attack.

First, the numbers for Tesla (ticker: TSLA). They are, frankly, amazing.

At the top of the market on Monday, Tesla was valued at more than $330 billion, more than Toyota (TM), Ford Motor (F), General Motors (GM) and Fiat Chrysler Automobiles (FCAU) combined.

At the close, Tesla is worth a mere $277 billion, more than Toyota, Ford and General Motors combined.

At the peak, Tesla would have been the 10th-largest company in the S&P 500. Inclusion in the S&P 500 index is on everyone’s mind these days and something investors believe is partly responsible for the stock’s recent volatility.

At the close, Tesla would rank as the 13th-largest. That is still larger than Netflix (NFLX). What’s the connection to Netflix? Tesla owners can download Netflix and watch while in the car—when it is parked of course.

The $55 billion of market value Tesla shed from peak to trough is worth more than GM and Fiat Chrysler combined. It is also more than the value of about 350 companies in the S&P.

Tesla’s reversal was the largest swing from positive to negative since June 30, 2010, according to Dow Jones Market Data. That was the only other time Tesla gained at least 15% intraday only to close in the red. That was one day after Tesla’s initial public offering. Tesla sold shares for $17.

Now for SPACs, short for special purpose acquisition companies. They have been popular lately. They are how Nikola (NKLA) became a publicly traded company. EV company Fisker and truck company Hyliion are being acquired by two other SPACs: Spartan Energy Acquisition and Tortoise Acquisition (SHLL), respectively.

Nikola, Spartan and Tortoise are up 423%, 114% and 48% year to date, respectively. All three stocks opened higher on Monday only to close lower. Spartan dropped almost 10% and Tortoise dropped almost 20%. Nikola, mercifully for its investors, dropped less than 1%.

What a day. The Dow Jones Industrial Average closed flat after being up early. The S&P dipped at the end of the day closing down about 0.9%.

Write to Al Root at allen.root@dowjones.com

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Tesla Stock Was Soaring. Then $55 Billion Got Knocked From Its Value. - Barron's
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