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Why Tesla Stock Is Getting Crushed Today

Shares of Tesla Motors (NASDAQ: TSLA  ) traded lower by as much as 7% on Monday to around $90 apiece. That's a steep decline from the stock's high last week of more than $114 per share. With the EV maker's annual shareholder meeting set for tomorrow, should this move in the stock be cause for concern? In a word: No.

What gives?
Tesla's stock has had such a nice run in recent months that today's sell-off is likely just investors taking some profits off the table. Tesla stock is up a whopping 188% so far this year on the heels of the company's first profitable quarter, an epic short squeeze in the stock, and its recent supercharger rollout.

However, smart investors know that Tesla is a long-term play. While the stock will certainly be volatile in the quarters to come, I suspect shares of Tesla will greatly reward those investors with a three- to five-year time horizon.

The company's disruptive retail strategy is still in the early stages both in the U.S. and abroad. Additionally, Tesla plans to begin production on its third all-electric vehicle, the Model X, next year. Given these catalysts and many more, I'm confident that Tesla has much more to offer investors down the road.

Read/Post Comments (12) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 03, 2013, at 3:17 PM, F2JP wrote:

    Good article: The question is, how low will Tesla's price go before the next wave begins?

    Of course this dip creates a nice buying opportunity for anyone wanting to get in, or back in.

  • Report this Comment On June 03, 2013, at 4:01 PM, rand49er wrote:

    So, the author has "medium low" investing experience and is not a licensed broker, but is basically telling us to invest in Tesla while admitting it's stock will be "volatile." Can't she be sued for this?

  • Report this Comment On June 03, 2013, at 4:20 PM, cottagetrees wrote:

    A volatile stock down 5% does not meet the definition of "getting crushed." Down 20-30% in a day, you can call that crushed. MF, please cut the hyperbole. Please also stop interweaving advertisements into the body of the story. Otherwise, it's a solid story, though it neglects to mention one of the key drivers of the initial surge - the nearly $1 billion in funding on terms very favorable to existing TSLA shareholders. As a long term long, I welcome the profit taking. I hope it lures in a fresh batch of shorts.

  • Report this Comment On June 03, 2013, at 5:52 PM, Pakirk53 wrote:

    This was not an article since no usable information is provided just an opinion from a Tesla Investor who thinks the stock will go higher based on her subjective good feelings for it. I get the impression she thinks its a "COOL!" stock to own.

  • Report this Comment On June 03, 2013, at 5:58 PM, spawn44 wrote:

    Article why Tesla is getting crushed but no mention of below average sales for May. Below average sales does should not be what's happening for a new car launch that's being hyped like this stock.

  • Report this Comment On June 03, 2013, at 7:21 PM, gene132 wrote:

    Sorry, but such a huge valuation makes no sense..we may well be seeing some "pump and dump" activity. Does Delorean Motors sound familiar?

  • Report this Comment On June 03, 2013, at 10:07 PM, BilFoxsoapbox wrote:

    $63M phony energy credits

    $15M bogus profit

    $48M Real loss

  • Report this Comment On June 03, 2013, at 10:41 PM, randomname7765 wrote:

    "So, the author has "medium low" investing experience and is not a licensed broker, but is basically telling us to invest in Tesla while admitting it's stock will be "volatile." Can't she be sued for this?"

    Why would she be sued for that? Only in America.

  • Report this Comment On June 11, 2013, at 12:01 PM, joenjensen wrote:

    Sorry but your bet is showing....your betting against a man who created Space X, Paypal, and now Tesla Motors, and you think he will fail?

    I doubt that Mr. Musk will come out with a new announcement that will change many minds, and then the stock will go just like his space ship to the space station.

  • Report this Comment On June 11, 2013, at 12:21 PM, damilkman wrote:

    Never bet on the man but on the investment. If you invested in the original Telsa's energy transmiting towers you would have lost your shirt :)

  • Report this Comment On June 17, 2013, at 7:32 PM, joenjensen wrote:

    It's really getting tiresome reading these made up stories that they truly believe is true. When are they going to learn that TESLA is the real thing, and they are wasting their time and keyboard making it up.

    Writing about TESLA like it's a waste investor time and money is just a waste of their time and money.

    At the turn of the century GM made an EV car and called it EV1, they gave them to several lucky people as a test, with the idea that it would fail, and those folks would give them back to GM willingly, but they had a hard time getting them back because they loved the car and wanted to buy them, but GM held fast and said no we want them back the test is over. GM CRUSHED every one of those cars, and the people who had them held a candlelight vigil to morn those cars. That's when the oil companies won and electric cars lost, with the big reason was distance. That reason has been put to rest with TESLA's Model S getting 270 miles on a single charge. What will the oil companies think of now to stop EV cars from becoming a reality?

    Personally I think they are running scared, and don't like or want the competition....TO BAD.....TESLA is here to stay.

  • Report this Comment On July 10, 2013, at 1:52 PM, ashunera wrote:

    Pakirk53 From what information did you deduce that the author thinks Tesla is a "COOL" stock to own? She clearly gave reasons for Tesla's rise in financial power. You might want to work on your basic reasoning abilities.

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