Ironically, after founder Elon Musk’s tour of Germany, the electric car manufacturer’s share price fell significantly. Investors should now keep an eye on the $ 400 mark set by the company’s recent stock split.
When Tesla boss Elon Musk was celebrated by politicians and the media during his visit to Germany last week, his company’s share price on the American technology exchange Nasdaq posted losses over several days. On Friday, the stock closed trading at $ 418.32, down 16 percent from a record $ 502 hit just days earlier on September 1.
But that’s not all: Because Tesla, contrary to what had been hoped, was not included in the broad American S&P 500 stock market index, the price lost another 6 percent after the stock market closed. The inclusion of the index would have created demand for Tesla stocks, which track the S&P 500, among index funds.
This development does not make Tesla a bad investment from one day to the next, especially since the share price is still well above the level at the beginning of the year. But a correction seems to be looming for the highly valued American technology companies, which is not only affecting Tesla. The technology index Nasdaq 100 recorded a drop of more than 5 percent on Thursday, which also affected other international stock exchanges. Investors in this segment apparently think it makes more sense to cash in profits instead of betting on further price increases.
Christian Kahler, Head of Equity Strategy at DZ Bank, examined the price / earnings ratio of the Nasdaq 100 and S&P 500 indices in a study published on Monday and found that corporate earnings have lagged behind rising share prices. He therefore expects a correction.
With a view to Tesla, it fits into the picture when hopeful statements by Volkswagen’s works council boss about the German car company’s e-car production now give VW shares a boost. Tesla founder Musk also stopped in Wolfsburg on his tour of Germany and is said to have made a test drive there in an electric ID.3 from Volkswagen. Works council chief Osterloh spoke in an interview published after the Musk visit that Volkswagen’s electric car production could catch up with rival Tesla earlier than planned.
Even if Tesla should continue to reverse gear in the beginning week on the stock exchange, investors shouldn’t forget one thing: It wasn’t until August 31 that the company split its shares in a ratio of 1 to 5 in order to visually reduce the price and for small investors to become more affordable. The stock even broke the $ 2,000 mark in the run-up to this split. The closing price on Friday of 418 dollars is still calculated arithmetically well above the barrier of 400 dollars, which can be set in view of the split at the price of 2000 dollars. Investors should therefore keep an eye on the $ 400 mark for further developments.