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Tesla Shares Fluctuate After Stock's Recent Rout

Tesla shares oscillated on Monday following Friday's rout as tech stocks extend their slump despite $1.9 trillion in additional government stimulus.

Tesla  (TSLA)  shares oscillated on Monday after Friday’s rout as tech stocks extend their slump despite $1.9 trillion in additional government stimulus that will help fuel demand for EVs and the infrastructure needed to keep them moving.

Tesla shares fell as much as 6% in premarket trading, extending losses that have lopped some $275 billion in market value from the clean energy car company since its shares touched a record high of $883.09 on Jan. 26. At last check, Tesla stock was down 0.56% at $594.60.

Shares of Tesla have fallen nearly 30% since the end of January - a reflection of several factors ranging from rising bond yields amid expectations for higher inflation and the falling price of bitcoin to anticipation of a ramp-up in competition, particularly in Europe and China where COVID-inspired consumer subsidies and rebates have sparked a sales surge for all kinds of EVs, and not just those made by Tesla.

Tech stocks in general suffered a setback in February amid rising bond yields, which in turn have moved higher on expectations that consumer prices could pick up faster than expected. The benchmark 10-year Treasury note’s yield has gained more than 65 basis points since late January. Last week, it rose above 1.5% for the first time since the pandemic began.

The Saturday approval of President Joe Biden's $1.9 trillion stimulus package likely will add to both market concerns for near-term inflation and the upward march in bond yields. Indeed, the Nasdaq was on track to slide back into correction territory Monday as further signs of a solid post-pandemic rebound rekindle inflation concerns.

It's Time for Cathie Wood to Call Bottom in Tesla, Jim Cramer Says

Tesla’s share-price drop has impacted well-known ETF Ark Innovation  (ARKK) , run by Cathie Wood. Ark Innovation counts Tesla as its largest holding.

To be sure, Tesla has no plans to scale back its future plans. Tesla CEO Elon Musk over the weekend responded to former Aegon Asset Management CEO Gary Black on Twitter that an update on Tesla’s hotly anticipated Cybertruck was coming soon. He also said the truck will be built at the company’s Gigafactory in Texas.

Meantime, Musk himself is looking to get into the Texas power market, with previously unrevealed construction of a gigantic battery connected to the state’s ailing electric grid that nearly collapsed last month in the wake of winter storms and record cold temperatures.

A Tesla subsidiary registered as Gambit Energy Storage LLC is quietly building a more than 100 megawatt energy storage project in Angleton, Texas, a town roughly 40 miles south of Houston. A battery that size could power about 20,000 homes on a hot summer day.

A filing with the Securities and Exchange Commission lists Gambit as a Tesla subsidiary.