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Shares of Tesla Inc (NASDAQ: TSLA) fell more than 21% on Tuesday, marking the worst day of decline for the automaker after being excluded from the prestigious S&P 500 index.
What happened: The drop in the value of the inventory of the company run through Elon Musk caused its market valuation to drop from $ 82 billion to $ 307. 7 billion. Inventory has increased approximately 295% since the beginning of the year.
Even though Tesla has achieved 4 consecutive quarters of profitability since its July results, the company has failed to reach the S&P 500.
This week, the company sold $ 5 billion in new stock to capitalize.
In late August, the automaker’s inventory suffered a 5-to-1 split, leading to an ending value of $ 442. 68 at the previous close of $ 2,238. 75.
Why It Matters: GLJ Research analyst Gordon Johnson gave Tesla a sell score with a value target of $ 19, yielding poor quality of earnings that led to the failed board of the S&P 500.
The company’s common capital increases, the trouble call, and indefinite accounts receivable balances even when sales have declined are some of the reasons the analyst cites for his rating.
Tesla price action: Tesla shares closed down 21. 06% at $ 330. 21 and fell 1. 85% in the after hours query at $ 324. 15.
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