What happened
Tesla (TSLA -2.04%) shares continued a slide today that has sent the stock price plunging by 55% since late September.
The list of reasons why is long and growing longer. Today, shares were down another 6.5% at the lows of the day as of 3:25 p.m. ET. That marks the lowest level since early November 2020.
So what
Tesla shares had been overvalued for a long time based on the fundamentals. But the promise of its growth rate and potential additional contributors, like its battery and energy segment, helped prop up its stock price.
Image source: Tesla.
Shares began retreating this fall when demand questions surfaced in its important Chinese market. Tesla has invested to expand production at its Shanghai factory, which many believe is its most profitable. Those demand questions remain today, as the status of COVID-19 infections' ultimate effects on the Chinese economy and consumers remain unanswered.
The other major overhang has been CEO Elon Musk's distraction running Twitter. The Tesla brand may be affected by Musk's increasingly public and controversial comments on the social media forum. Today, one analyst chimed in, slashing its price target on the stock by one-third.
Now what
Evercore ISI dropped its estimate on Tesla shares by $100 per share to $200, reports CNBC. While that still represents a gain of more than 40% from today's level, it's a major adjustment in the outlook. The firm said it thinks the company needs to launch a mass-market, low-cost Model 2 EV for the stock to recover.
The company itself has said a lower-cost offering is in the works but hasn't given a time line. It's possible that investors will stop selling shares and the stock will turn around before that. For now, however, some investors fear how low shares could go before any reversal.
One thing we know: That reversal isn't coming today.
