Tesla Stock Falls Hard Despite Elon Musk's Claim That It Will Eventually Have $500 Billion Market Cap
Plus, Under Armour stock jumps based on an analyst upgrade.
The report yesterday of a third fatal accident possibly involving the company's autopilot feature sent Tesla shares plummeting 7.46 percent. CEO Elon Musk recently suggested that autonomous driving vehicles would eventually give Tesla a $500 billion market cap ... the company is currently worth $37 billion.
An email from Musk to Tesla employees about the need for a "hard-core" cost-cutting effort also shook investor confidence. The stock set a new 52-week low today and MKM Partners analyst JC O'Hara suggested that the shares had no technical support in the market until the $185 level -- another 13 percent drop from the current price. The shares are now down 36.6 percent this year.
The broader stock market recovered from a poor start to the trading session thanks to more good economic news but fell again in the afternoon as CNBC reported that trade talks between the U.S. and China had stalled.
U.S. consumer sentiment in early May hit its highest level in fifteen years. However, it wasn't enough to allay investor fears about fraying global trade relations. The major indexes all ended the day in the red with technology stocks pushing the Nasdaq Composite index down 1.04 percent. The Entrepreneur Index™ fell 1.15 percent with Tesla and weak technology stocks being the biggest factors.
Analog Devices fell another 3.7 percent today after losing three percent yesterday. The chipmaker has substantial business with Chinese telecom giant Huawei Technologies, which has been targeted by the Trump administration as a national security threat. Fellow chip-maker NVIDIA Corp. was also down sharply despite beating earnings and revenue estimates with financial results reported today. The stock was down 2.28 percent. The rest of the tech sector was also weak with TripAdvisor Inc. (-3.76 percent) and salesforce.com (-2.47 percent) posting sharp losses.
Casino-operator Wynn Resorts fell 4.63 percent today as sentiment on relations with China continued to deteriorate. The company derives 70 percent of its revenues from casinos in Macau. Wynn is also reportedly in talks to sell a hotel-casino complex in Boston harbor to MGM Resorts.
Clothing-maker Under Armour Inc. had the biggest gain on the index today. The stock jumped 7.7 percent after getting an analyst upgrade to overweight from J.P. Morgan Securities. The company beat analyst expectations with quarterly results reported two weeks ago. The shares are up 32.8 percent this year.
Cognizant Technology (1.36 percent) was the only other stock on the Entrepreneur Index™ with a gain of more than one percent today. Chipotle Mexican Grill and J.M. Smucker Company were also up 0.98 percent and 0.92 percent respectively.
The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.