Tesla’s stock has plunged 34% in one week

Telsa’s shares tumbled to $330.21 at the market’s close on Tuesday, down from a high of $502.49 during mid-day trading a week ago. On Tuesday alone, the electric carmaker’s stock sank more than 21%, its worst daily decline ever.

The drop is largely attributed to Tesla being snubbed from inclusion in the S&P 500 index on Friday, surprising investors who thought that the company was shoe-in for the list. Tesla also announced it had sold $5 billion of new shares, diluting the value of stock held by existing investors. 

Meanwhile, shares soared Tuesday for Tesla competitor Nikola, an electric vehicle and fuel-cell startup, after partnering with General Motors on an electric pickup truck that is expected to start production in 2022. The truck will compete with Tesla’s Cybertruck, which Tesla expects to begin producing late next year.

Tesla’s stock decline also coincides with major reversal in the Dow Jones and Nasdaq indices, which had been on a tear this year despite the economic calamity caused by the coronavirus pandemic. Technology stocks have suffered the most, with big tech firms like Apple, Facebook, and Amazon all tumbling in recent days.

With its falling share prices, Tesla’s market value has declined to $307.7 billion, down from $468.2 billion last week. During its run up, Tesla market capitalization had surpassed that of Walmart, giving Tesla huge bragging rights in the process. But now Tesla’s value has tumbled well-below the giant retailer, which was worth $392 billion as of Tuesday.

Despite the decline over the past week, Tesla’s stock is still up nearly 284% since the start of the year.

Colin Rusch, analyst at investment bank Oppenheimer, said he expects more stock market volatility during the rest of the year. But as far as Tesla is concerned, he sounded a somewhat positive note, saying the company’s technology and cars have a “fundamental lead” over rivals.