"Share dramatically overvalued": Tesla collapses on the US stock market

Wednesday December 09, 2020

"Share Dramatically Overvalued"
Tesla breaks on the US stock exchange

The equity boom continues on Wall Street: The hope of an agreement on the US economic stimulus package has meanwhile pushed the most important indices to new highs. Investors rate the papers of the electric car maker Tesla very differently – they have a black day.

Movement in dispute over another US stimulus package brought new record highs to Wall Street. However, the beginning of profit-taking ended the initial high-altitude flight. The U.S. Standard Values ​​Index Dow Jones closed 0.3 percent in the red at 30,069 points. The broad one S&P 500 and the tech-heavy one Nasdaq lost up to two percent. At the opening, the three indices each set new records with 30,320 counters, 12,607 digits and 3712 points.

The back and forth with the stimulus package unsettled investors, said Randy Frederick, manager at brokerage house Charles Schwab. According to Mitch McConnell, the Republican majority leader in the US Senate, some questions remain unanswered. Meanwhile, the House of Representatives is preparing a bridge funding to gain more time for negotiations.

The unchanged positive mood of the investors was fed by the announcement of the health company Johnson & Johnson, important test results of his corona active ingredient could be available earlier than planned. The company's shares then expanded their recent gains and rose 1 percent.

On the other hand, investors withdrew from "safe havens". So the "anti-crisis currency" suffered gold almost two percent to 1,838 dollars per troy ounce (31.1 grams). This put precious metal miners under pressure to sell. The shares of Barrick, Newmont or Anglogold Ashanti lost up to 3.1 percent. US Treasuries were also less in demand. This drove the yield on ten-year T-bonds to 0.941 percent.

Investors also carefully watched the IPO of Door dash. The food delivery company sold its shares at $ 102 each, above the supply range. In total, the company raised just under $ 3.4 billion. Door Dash stocks closed nearly 86 percent above their issue price at $ 189.51. Share price gains of more than 170 percent at times C3.ai. The shares of the specialist in analysis software to prevent money laundering or fraud ended their first day of trading 120 percent up at $ 92.49. The company had allotted 15.5 million shares at $ 42 each.

Facebook and Tesla big losers

The papers of Facebook on the other hand slipped by two percent. The US antitrust agency FTC and almost all US states are suing the online network for alleged abuse of power. Their goal is, among other things, that the group has to sell messenger service Whatsapp and the picture and video platform Instagram.

The papers of Tesla even slipped seven percent after opening to a record high of $ 654.32. The analysts of the bank JPMorgan warned against including the electric car pioneer according to its future weighting in the index S&P 500 in their portfolios. "The stock is dramatically overvalued by pretty much any conventional metric." The titles have increased 650 percent since the beginning of the year. The plus since the announcement of the move into the S&P 500 in November has added up to 50 percent.