Tesla (TSLA -6.84%) Stocks continued their recent decline, hitting a two-year low on Monday. As of 2:25 p.m. ET, the stock had fallen 6.8% to give him about $168 per share. This is the lowest level since November 2020.
The reasons for today’s decline are the same ones that have caused the stock to fall more than 40% over the past three months. But there are also some new developments.
Investors are selling Tesla shares as CEO Elon Musk had to sell his stake this year to fund the Twitter acquisition. Musk has sold around $19 billion in total in connection with his Twitter acquisition in 2022. He also recently had to devote time and energy to his social media company.
Today’s decline could also be attributed to newly announced recalls and renewed concerns over COVID-19 restrictions in China.
China announced three COVID-19 deaths in its capital Beijing over the weekend. This marked the first official death attributed to the virus in China since May. Authorities have also locked down the most populous part of the large southern port city of Guangzhou as cases continue to rise. Tesla’s largest factory is in Shanghai, and investors fear a disruption in sales from that facility could have a noticeable impact on the company’s fourth quarter.
Investor sentiment didn’t help when the recall of 321,000 Tesla vehicles was announced in the US over the weekend. That said, the news was more of a headline than a concern about business impact. The recall was for a rear tail light issue that the company fixes with an over-the-air update.
But investors now see a few things stacking up, and Tesla stock still holds strong valuations on traditional metrics.this is Price Earnings Ratio (P/E) Over 50 on a 12-month basis. So, recent news impacting the business and brand has driven the stock price down and down. For long-term investors, as business prospects continue to grow, this could be an opportunity to start investing in equities.