At the close of early hours of February 6, Beijing time, Tesla’s shares plunged 17.18 per cent to $734.7, the biggest drop in history, and analysts downgraded the stock, ending Tesla’s rally, which had risen 36 per cent in the previous two sessions.
The shorts have weighed heavily on Tesla. Tesla is one of the most shorted stocks on Wall Street.
In fact, as Tesla’s share price has soared nearly 300 percent in the past six months, those who short the stock and try to limit its downward trend have lost more than $8 billion since the start of the year, according to S3 Partners. That includes losses of nearly $2.5 billion, which were caused by a nearly 20 percent surge in the stock market on Monday.
On February 4th Tao Lin, Tesla’s global vice president, tweeted a response from users about whether the outbreak would affect the delivery of the domestic model 3, saying that new car deliveries scheduled for early February after the Spring Festival would be put on hold and plans were being made.
Jed Dorshemer, an analyst at investment bank Canaccord Genuity, downgraded Tesla’s (NASDAQ: TSLA) stock rating to “hold” from “buy” in a research note released Wednesday.
Only about a fifth of Wall Street analysts who track Tesla’s stock now have a rating of “buy.”
Since Tesla reported third-quarter 2019 results, analysts have raised their target price average for the stock from about $300 to $500. Tesla’s share price has risen from $250 to $900 over the same period.
Currently, only about 20 percent of Wall Street analysts who track Tesla’s stock give it a “buy” rating.