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Why Tesla Stock Fell Friday

By Daniel Sparks – May 1, 2020 at 1:21PM

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Tesla CEO Elon Musk believes the electric-car maker's torrid rise over the past 12 months has made the stock overvalued.

What happened

Shares of Tesla (TSLA -6.32%) plummeted on Friday. The stock was down about 11.6% as of 12:06 p.m. EDT.

While bearishness in the overall market on Friday likely weighed on the stock some, most of its decline came after CEO Elon Musk tweeted, "Tesla stock price is too high imo" -- "imo," of course, means "in my opinion." 

Tesla's Models S, 3, X, and Y parked on a paved area in the mountains

Tesla vehicles lined up. Image source: Tesla.

So what

Musk's comment on Tesla's stock price comes after shares have skyrocketed. The growth stock is up nearly 200% over the past 12 months and almost 70% year to date.

In addition to his tweet about Tesla shares being overvalued, the CEO also said on Twitter that he is "selling almost all physical possessions. Will own no house." In the seemingly random tweetstorm, Musk also added, "Now give people back their FREEDOM."

Musk's tweets on Friday come two days after the outspoken CEO lashed out in rant during Tesla's earnings call about orders for businesses to shut down amid the coronavirus pandemic. Stay-at-home orders were "fascist," he said in the expletive-laden rant. 

Now what

These erratic tweets from a high-profile CEO likely concern many investors. Musk has used Twitter as a platform to speak his mind unrestrained on occasions in the past. Some of his tweets have even led to Musk losing his seat as chairman of the company's board of directors.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla and Twitter. The Motley Fool has a disclosure policy.

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