Please ensure Javascript is enabled for purposes of website accessibility

Why Tesla, Delphi Technologies, and II-VI Slumped Today

By Dan Caplinger - Updated Oct 5, 2018 at 4:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Find out which of these stocks fell the most.

Wall Street ended the week on a negative note, with the Dow Jones Industrial Average falling by triple digits for a second straight day and other major benchmarks suffering declines of as much as 1.2%. The latest news on the employment front seemed to be the catalyst for the downward move, as initial optimism about future U.S. economic prospects gave way to nervousness about possible responses from the Federal Reserve to rein in the economy before it overheats. Some poor showings from certain individual stocks also weighed on investor sentiment. Tesla (TSLA -0.84%), Delphi Technologies (DLPH), and II-VI (IIVI -2.58%) were among the worst performers on the day. Here's why they did so poorly.

Elon Musk makes news again

Tesla stock dropped 7% after more comments from CEO Elon Musk made news. The electric car company's leader made disparaging comments about the U.S. Securities and Exchange Commission, suggesting that the regulatory agency has only made it easier for short-sellers to bet against Tesla's long-term prospects. Shareholders worry that coming just after Musk and Tesla had settled fraud allegations related to the CEO's failed attempt to take the company private, the comments could spur further litigation against the automaker. For many investors, Tesla's endless exposure in the news has merely distracted from the opportunities and challenges facing the company.

Red Model S driving on curving road with mountains in the background

Image source: Tesla.

Delphi deals with a departure

Shares of Delphi Technologies fell 13% in the wake of a major departure from the executive suite. CEO Liam Butterworth chose to step down from his role after less than a year of leading Delphi, and investors also reacted negatively to Delphi's reduction in its revenue guidance for the full year. Hari Nair will take over as interim CEO of the vehicle propulsion systems specialist, and with more than 30 years of experience in the auto industry, Nair should have the knowledge necessary to hit the ground running. Nevertheless, investors want to see more evidence of rebounding sales before they'll feel fully comfortable with Delphi's prospects.

II-VI falls in sympathy

Finally, II-VI stock finished down 8%. The laser maker declined along with several other players in the industry, as investors reacted to downbeat news from II-VI peer IPG Photonics. IPG cut its revenue guidance for the current quarter, blaming the recent imposition of tariffs for much of the fiber laser specialist's top-line shortfall, and earnings will likely trend toward the bottom end of the company's previously stated range. It's unclear how long tariffs might last, but as long as they do, the heavily trade-dependent laser industry could remain under pressure, hurting the prospects for II-VI and others.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends IPGP and Tesla. The Motley Fool recommends II-VI. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

II-VI Incorporated Stock Quote
II-VI Incorporated
$53.19 (-2.58%) $-1.41
Tesla, Inc. Stock Quote
Tesla, Inc.
$911.99 (-0.84%) $-7.70
Delphi Technologies PLC Stock Quote
Delphi Technologies PLC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.