Tesla plunge wipes out $90B in a week

The rout in Tesla shares this week has far exceeded the broader market’s decline and already wiped out nearly $90 billion from the electricvehicle maker’s valuation.

To put that loss in perspective, consider that it exceeds the entire individual market capitalizations of about fourfifths of companies in the S&P 500. Tesla’s shares fell below the $600 mark on Friday, plunging to their lowest since Dec. 10. The stock has now lost 17% of its value just this week, extending its 2021 drop to 20%.

The surge that helped propel the Elon Musk-led company into the ranks of the S&P 500 in 2020 has turned into a steep decline this year amid a greater push from legacy automakers into electric vehicles. Traditional industry bigwigs including General Motors Co., Ford Motor Co., Volkswagen AG have all in recent months announced their EV lineups and the intent to aggressively expand into the nascent market.

Tesla’s lofty valuation also took a hit from a broader sell-off in high-multiple technology stocks this week. Investors ditched the group amid a rise in Treasury yields, leading to concerns that companies trading at high valuations may not perform up to expectations if borrowing costs surge.

The EV industry leader was among the top decliners in both the Nasdaq 100 Stock Index, as well as the S&P 500 Index.

Tesla’s current market capitalization stands at around $552 billion, a far cry from the high of $837 billion it reached in late January.

Smaller EV startups also followed into Tesla’s lead on Friday. Major decliners in the group included Lordstown Motors Corp., Nio Inc., Workhorse Group Inc., XPeng Inc., as well as some of the blanck check companies awaiting merger with electric car makers, such as Churchill Capital Corp. IV and Northern Genesis Acquisition Corp.