As a volatile stock, Tesla (TSLA) has taken a strong hit in this market correction triggered by the coronavirus crisis. Now the stock tumbles even further, below $400 a share, as the automaker is forced to shut down their Fremont factory.
As we reported earlier this week, it looked like Tesla was trying to defy the shelter-in-place order in the Bay Area by trying to keep its factory going.
However, the local sheriffs’ department got involved and declared Tesla not an “essential business.” It said that the factory, where Tesla produces most of its vehicles, must obey coronavirus shutdown order.
The stock plunged by as much as 10% in pre-market trading after the news was announced.
It resulted in TSLA’s stock being down more than 50% since achieving new highs earlier this year:
The stock was trading at $395 per share at the time of writing versus over $900 per share just a month ago.
Several Wall Street analysts, who increased their price target following Tesla’s run earlier this year, have been revising their target price on Tesla following the coronavirus crisis, which is expected to affect the global automotive market in a significant way this year.
They now expect Tesla’s deliveries to be slashed by almost 100,000 units due to the crisis and the economic downturn.
Tesla’s stock is simply back to the level it was in December 2019 just a few months ago, so it’s not that shocking to see Tesla at these levels.
However, I wouldn’t take this crisis lightly. Again, it seems like everyone is either overreacting or not taking the threat seriously enough.
If anything, this whole thing made Elon Musk’s move to raise capital to “strengthen Tesla’s balance sheet” earlier this year look like pure genius.
What do you think? Is it a good time to buy Tesla stock, or should we wait and see a little longer? Let us know in the comment section below.
FTC: We use income earning auto affiliate links. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.