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These 2 Once-Hot Stocks Sent the Nasdaq Lower Monday

By Dan Caplinger - Updated May 3, 2021 at 4:22PM

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Find out what was responsible for the Nasdaq missing out on gains.

Wall Street in general got off to a good start on the first trading day of May. However, the Nasdaq Composite (^IXIC 0.00%) was the sole laggard among the big indexes, falling about a third of a percent as of 2:30 p.m. EDT Monday afternoon even as other major benchmarks climbed to record heights.

A couple of stocks played noteworthy roles in dragging down the Nasdaq on Monday. Biopharmaceutical company Novavax (NVAX -1.17%) got some bad news on its COVID-19 vaccine, while Tesla (TSLA -0.57%) appears to be suffering a delay that could put a wrench in its plans to boost electric vehicle (EV) production in the near future.

For Novavax, waiting is the hardest part

Shares of Novavax were down more than 16% on Monday afternoon. The company has a promising COVID-19 vaccine candidate in NVX-CoV2373, but investors weren't happy with the potential timeline for a prospective deal to distribute the vaccine if it gains approval.

Four vials with blue lids labeled COVID-19 vaccine.

Image source: Getty Images.

Novavax has been working for months to try to complete an agreement with the European Union to provide NVX-CoV2373 for vaccination efforts. However, due to some supply chain problems, it had to delay hammering out a final deal. Now it appears that even if an agreement gets done, Novavax still won't deliver most of the expected 200 million doses until 2022. Given the slow pace of vaccinations in many countries around the world, that shouldn't be too late to play a role, but it's still not as fast as expected.

Investors largely ignored some good news, however. The company also said it would begin an expansion of its phase 3 trial of the vaccine candidate to include youths between 12 and 17. If the trial is successful, it could mean expanding downward the age at which people can take the vaccine. Currently, those under age 16 have no vaccine available even under Emergency Use Authorization.

Novavax has lost almost a third of its value in just the past few months. That shows how impatient shareholders are for the company to get through trials and prove the effectiveness of NVX-CoV2373 while there are still good opportunities for its use.

Delays for Tesla

Meanwhile, Tesla shares fell almost 4% on similar concerns about delays. The electric vehicle maker has made promises to boost production at a healthy rate for the foreseeable future, but a possible issue with a key project could prove to be an obstacle.

Tesla has been expanding its production capacity for quite a while, with plans to open new manufacturing facilities at key points around the world. However, over the weekend, reports surfaced that suggested that Tesla's planned Berlin Gigafactory in Germany might not be able to ramp up until the end of 2021. That's considerably later than the July time frame Tesla had hoped for.

That's bad news for the more ambitious analysts among those following Tesla. The company had set expectations for 50% expansion of its vehicle delivery volume in 2021, which would work out to about 750,000 cars. However, some analysts were looking for more than 900,000 Tesla deliveries, pointing to the pending opening of the Berlin Gigafactory as a key contributor. If the plant doesn't open this year, that'll make the higher number very difficult to achieve.

What's unclear is to what extent Tesla's soaring share price in 2020 was based on immediate production and delivery increases. Today's drop in the stock is small in comparison to its rise last year, but if Tesla were unable to get things back on track, it could be just the beginning of a larger pullback.

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Stocks Mentioned

Novavax, Inc. Stock Quote
Novavax, Inc.
$63.54 (-1.17%) $0.75
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$11,322.24 (0.00%) $0.00
Tesla, Inc. Stock Quote
Tesla, Inc.
$695.20 (-0.57%) $-4.00

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

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