Tesla Stock (NASDAQ:TSLA)
The news that almost 1.1 million Tesla (NASDAQ:TSLA) vehicles were recalled swiftly circulated yesterday. However, that is probably not what caused today’s stock market drop. Tesla stock was down almost 5% from its morning highs. The stock was trading near that price, down 4.6% as of 1:48 PM ET.
What’s the Reason?
Even though the stock market isn’t always efficient, a basic calculation shows that Tesla stock price decline for a second day isn’t due to the recall. The value of Tesla stock has fallen by $75 billion in the last two trading days, even though the recall won’t compel owners to bring their cars back to dealerships for repairs.
What has caused Tesla stock to drop by more than 8 percent in only two days? There may be an easy way to explain it.
What Should You Do Now?
Nearly 1.1 million Tesla EVs were recalled due to a possible pinch danger caused by the automatic window system’s failure to identify blockage. The older Model 3s (from 2017) and the newer Models X, S, and Y are included. When the National Highway Traffic Safety Administration (NHTSA) released its report, Tesla (NASDAQ:TSLA) CEO Elon Musk moved to Twitter to provide further context.
Tesla (NASDAQ:TSLA) stated that it had not received any warranty claims and had not even heard of any injuries that may have resulted from the issue. Musk said the vehicles can be corrected with “a simple over-the-air software update,” He questioned if the NHTSA’s language should be revised to reflect this. In fact, he didn’t want to use the word “recall” at all, saying that it was “outdated and misleading” because the problem could be fixed without having to take the car in for maintenance.
Despite the recall’s prominence in the news, Tesla stock has undoubtedly declined over the previous two days, along with the rest of the technology industry. Some investors fear a recession due to the Federal Reserve’s interest rate rise. A firm like Tesla (NASDAQ:TSLA), with a projected price-to-earnings ratio of around 65, would be an obvious target.
Featured Image- Megapixl @ Grigvovan
Author Shariq Khan 
