Tesla Stock Price is GOING DOWN! why it is
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In this video here today we get into why Tesla stock is going down so much so fast!
Tesla stock has gone down about 34% in the past 5 trading days in the stock market! This is a massive move down for Tesla stock price. Many folks are wondering what the reasons are for Tesla stock price continuing to go down so much!
Will Tesla stock stop going down anytime soon?! I will try my best to explain why Tesla stock is in the perfect storm right now and why Tesla stock price is going down so much!
Elon Musk net worth has dropped 10s of billion the past 5 days! Absolutely unreal!
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Well, you must be flipping my flapjacks look at Tesla, my Tesla stock here today down around 20% for good old Tesla stock here day. Oh my goodness, guys, it is a vicious vicious day out there for all Tesla’s shareholders.
And man, you know, I don’t know what to say other than it’s a vicious day. Okay. And it’s not just been a vicious day. It’s been a vicious last several days of Hey, let’s be very clear about this. I mean, the stock topped out last week around I think it was around just around $500 a share, right?
And ever since then, it has been down, down and down, okay, and now it’s under $340. In just about like five trading days. Like that is extreme volatility. Needless to say, check out the market capitalization for Tesla here today.
It’s lost over $100 billion in market capitalization. Just in the past five trading days, well over $100 billion. I think it’s closer to $150 billion of valuation lost in stock literally in five trading days.
Okay, look at that photo on the right that guy there. That’s the guy that he bought at an all time high for Tesla. He bought the stock at like $500 a share last week, and he is just absolutely devastated in this whole situation right now. Right?
The five day performance and Tesla stock is down well over 30% now for the stock. I mean, if you bought the stock a year ago year to date, three months ago, you’re looking pretty, but let’s be very clear if you bought this stock any point in the last five days.
Yeah, I mean, you’re getting absolutely devastated. And a lot of people piled in this stock very late to the game and very late to the party and those people you know, obviously aren’t having such a happy time here to start out with if they just start building their position in the past week or two.
Okay, but why is Tesla stock falling so much? And why is it falling so fast? These are the questions I’m getting from people out there right now. And that’s what I want to address in this video here today. I want to answer this for you.
Okay, you ever seen that movie the perfect storm with George Clooney Mark Wahlberg? You know kind of movies probably 1520 years old now. Okay, they go on his fishing boat and they’re out in the middle ocean the perfect storm comes it like you know almost pretty much like takes them out and basically imagine.
Tesla stock is that ship right now it is caught in the middle of the perfect storm to take this stock down. So much so fast. Okay, you don’t lose $150 billion, roughly, of market cap that fast. Okay, there are seven Yes, seven reasons why not just one or two reasons, seven reasons why Tesla stock is going down so much and so fast.
Okay, that’s tests a stock, just, it’s caught in the big wave. And yeah, we’re gonna get into these seven things. It’s an ugly situation right now. Okay, so hope you guys enjoyed today’s video. As always, if you don’t mind smash the thumbs up that helps you to chill out in a massive way.
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Okay, reason number one up here of the seven reasons why the stock is going down so much so fast is the spec people are now starting to sell off heavy. Okay, I was telling you guys, I didn’t like how all these speculative, you know, traders were getting in the stock over the past month or two.
Let’s just put it that way. Okay. Think about all the people that piled in the stock, just speculating because of the stock split in the s&p 500 inclusion that a lot of people thought so many people bought into the stock just off a short term basis didn’t care anything about Tesla’s mission.
Anything about what Tesla was doing long term anything about the Tesla numbers they no clue about. And they were simply buying because they said Tesla stock gonna go up a bunch in the short term because the stock splits gonna happen. And then Tesla is going to get added to the s&p 500.
And so therefore, stocks gonna go up a bunch. And I told you guys, this was annoying to me, because all it was doing was was fabricating short term numbers for Tesla in terms of stock price, and was giving us a false interpretation of what Tesla’s real valuation should be, and how much we should actually be up on the stock.
It does mean no pleasure if I’m up an extra $100,000 on Tesla stock because I’m not selling Tesla stock regardless right now. So I would rather have tests to be in a more realistic valuation, then like everybody just pile it in because of the short term crap that you know, so many traders would get involved with this stock at the split now is a thing of the past. Right?
That happened over a week ago now. And it’s all over. It’s all in the past. Now the stock split, okay. In terms of the other big reason why so many people were speculating so many traders were getting in the stock recently was because old Tesla was going to get added to the s&p 500.
Well, guess what it was announced recently, Tesla will not be added to the s&p 500. Now the silly thing about this is, Tesla will still likely be added to the s&p 500 down the road. Yeah, it’s not right now.
But keep in mind like three months from now, six months from now nine months out 12 months from now, it could get added to the s&p 500 so This just shows you how many short term speculators are in the stock that the stock would sell off 20%. Today, based upon the news that broke, were basically Tesla’s not getting included in the s&p 500.
It’s sad how much trader money came in the stock and how those traders just treated this stock like it was a casino. It’s absolutely, you know, I don’t like it. Let’s just put it that way. And it’s something that annoys me. And yeah, and now basically, things are coming back to reality.
And yeah, we’ll see when all these you know, speculative people finally get out the stock, was it today, we finally flush them all out? Is it gonna take enough, you know, few trading days to get all these people out? We’ll see.
Basically, we will know for at least another week or two, you know, if all these people kind of flushed out or not, we’ll get to see in the pricing action. Okay. Number two of seven reason up here, why the stock is selling off so fast and so much is all those people that were like, hey, Tesla stock and goes up almost every day.
Let me buy some because it’s such easy money to make in the stock market. I mean, look at that Tesla stock, it just goes up all the time. Let’s look at a chart of Tesla stock over the past six months. Okay, what are you going to see, Tesla stock was almost up in a straight line, right?
It took a couple breathers along the way, but it was almost up in a straight line. I mean, this stock on a split adjusted basis, this stock went from like $100, a share to $500 a share in about a five month span, right, five, six months.
And you have, you know, Tesla’s most popular stocks in the stock market, let’s be honest, right. And so you have so many people that were on the sideline along the way or maybe own some shares. And they saw this price action.
And they said, Dude, this stock goes up almost every day, it’s just such easy money, I just have to buy Tesla stock and buy Tesla stock and buy Tesla stock. And what ends up happening when too many people see this and too many people are getting involved and putting in too much money, it creates too much buying pressure on the stock.
And when you have too much buying pressure on the stock, what ends up happening, right, the bids get pushed up and pushed up and pushed up, and you don’t have as many sellers out there. So the ass continues to get pushed up and pushed up. And you basically have a stock that just keeps going up keeps going up.
And it starts to become like a self fulfilling prophecy that hey, Tesla stock is going up. And a bunch more people buy in and makes it go up. And then a bunch more people see that and they say, oh, Tesla stock keeps going up.
I gotta buy it, they buy and it’s just like, it keeps going and keeps going like crazy. Okay, the flip side can happen when basically there’s too much selling pressure on a stock. And guess what happens with that stock price.
It goes down and down and down. Let’s be honest, everybody’s been talking about the stock. Who cares anything about the stock market right now? I’ve been telling friends, family, bro, buy some tests, the stock man is only going up, you got to do it.
Get some tests on my esa stock mom. Come on is the best deal ever. You’re gonna make some easy money, Santa Claus, buy some Tesla stock, and then all sudden, right now, we had the reverse. Okay, somebody pulled out the reverse uno card and said, okay, and all of a sudden now everybody’s saying, hey, sell your Tesla last summer, sell it.
Okay, take the profit run. Remember, these people were speculating in the stock as it was. Okay. So now you’re having a lot of people just saying, hey, you made a bunch of money, get out, get out, get out, get out, take the profits, okay.
And like I said, I hate when I see this type of activity in stock I own as a long term investor, because just a bunch of people gambling around money and trying to play you know, hot potato with it in the short term. It’s no fun.
I don’t like it, but it’s what is happening right now. Okay, reason number three of seven, why the stock is going down so much so fast. You ever seen the movie margin call? It’s a wonderful movie. Okay.
You know, for my stock market nerds, you guys will all love this movie. If you’ve never seen it before. If you’re not super into the stock market in business, you might hate the movie, you might think it’s boring, but for us that love this type of stuff.
It’s a wonderful movie. Okay. And in margin call what happens? Okay, basically, it’s kind of like in the 2008 financial crisis, right? And it’s just big, you know, investment bank, and basically trying to sell out of all these positions they have that were, you know, highly dangerous positions they hadn’t on the housing market, essentially.
Okay. And because margin calls are coming, and that would have taken down the entire firm, right? Well, you know, you’ve had a lot of people margin out money to buy Tesla stock because it’s been going up so much so fast.
So that definitely a good amount of investors say Do I have to get every dollar possibly Kevin Tesla stock, even if it’s dollars, I don’t have I’m gonna margin out money because it just keeps going up and and then when also you have the reverse happen your foot and it starts going down and down and down and down and down.
All of a sudden, you get a lot of people into really ugly situations that were margining out money, whether it’s funds or individuals in general, it caused force selling, okay for selling is when you have no option other to sell your position. Okay?
Keep in mind, there’s also stop losses, which is another kind of forced selling situation, but I’m really you know, speaking about margin, when you get margin calls from your broker, whether you’re a big you know, investment bank or funboard, an individual investor, let’s say you got 50k in Tesla stock and then you margin down another 50k.
And Tesla stock now it’s going down a bunch and also you have margin loans. coming after you, right? It causes you to force sell the stock. Remember we talked about if there’s too much selling pressure on stock, it makes it go down and down and down.
That’s the situation we have right now margin calls and stop losses to Long’s meaning people that are, you know, invest in the stock for the long term, or just invest in the stock, you know, we’re planning on going up is basically what forced short covering is to short sellers, right?
If we look at what has happened with Tesla stock over the last five months or so, right, the stock just kept going up and up and up. And if you were short selling Tesla stock, right, you kept having to be forced to cover your possession.
And it gets really ugly really fast. Because basically your broker saying, Hey, man, this stock just keeps going up, you know, you’re not meeting your your, basically margin requirements. And we need you to cover your short position.
And when you cover your short position, you have to buy the stock, okay. And when you buy the stock, guess what that creates, it creates more buying pressure on the stock, right, and maybe you had a stop loss of some kind on your short position, which most people that take out short positions on stocks, they have stop losses in there.
And if their stop losses are hit, they have to cover their shares, they have to buy back their shares, it causes more buying pressure on the stock, okay, it gets into a really ugly situation for anybody that’s short selling the stock.
And this is why you have short squeezes that cause stocks to go up so fast. Okay, now, margin calls stop losses, they cause even more margin calls and stop losses, right, because the stock continues to go down. So you have more and more people selling you have more and more selling pressure on the stock, you have more sellers and buyers out there.
So just creates this massive snowball rolling down a big mountain, right? Imagine, you know, the big avalanche coming in, it’s just causing more and more snow to get piled on. It’s so bad man. More margin calls cause more people to sell more stop losses being hit cause more people to sell.
Which causes even more people to get margin calls, which causes even more people to get stopped losses and eventually that ends that cycle ends. But man when it gets ugly, it gets ugly, fast. And that’s how you get test. So to lose, you know, what did it lose today in terms of market capitalization.
It might have lost, you know, 60 to $80 billion of market cap today. That’s how you get that to happen, man, you just get that massive avalanche running down the hill the wrong way. Okay. Reason number four of seven.
Why this talk is going down so much so fast, is the buying hype has slowed down big time on this stock. Okay, let’s be honest, there’s not a lot of people saying, you know, Tesla stocks a great deal recently, let’s just be completely honest about that.
In terms of height from the company, it was not much recently, right, we have all the things we’ve had out there and that we’re excited about right Model S model three Model X model y, you know, obviously cybertruck not shown off last year, we have the second part of the Shanghai Giga factory getting built out right now. Right?
We have the Berlin Giga factory being built out. We have Austin, Texas coming. But all this news has been known for months. So we haven’t really had any, you know, earthshaking, great news come out for tests, or the company recently that made everybody say, I gotta go buy Tesla stock, right?
It’s just, you know, all this stuff has been known. Now the company is just executing really well and should for the next several years, right? On top of that, when you think about like the buying hype around the stock right?
Now, I did a video with Andre, that was like, we did that video about 24 to 48 hours before Tesla stock started to dive in a massive way. Okay. And in that video, I go on to say, it’s going to be dangerous for anyone buying the stock short term. Okay.
I also said in that video, Tesla is a no touch, in my opinion right now. Okay, that was literally recorded, like one to two days before Tesla stock started dying massive. And when you have somebody like myself, you know, come out and say things like that.
And it’s gonna cause a lot of people to, you know, kind of look around and be like, hmm, not sure I want to buy the stock. And you know, when Tesla was trading at like a 400, and what was a $50 billion market cap at its highs, or whatever it was, you know.
It was just it gotten out of control, the stock was pricing in at least five to seven years of growth at a $450 billion market cap it had gotten to a situation where it was just ugly, let’s just put it that way. And that’s why I have to get to a situation where I.
I can’t like condone people buying the stock like obviously, you know, people can make their own decisions out there and do whatever they want. But when it comes to me giving my personal opinion, I basically said this is stocks, you know, no touch.
And you have also people like galley, right. galley is one of the most respected people when it comes to Tesla stock, right. Last week, he announces, he’s selling, you know, a portion of his shares to buy a model why I’m super thrilled for him super happy about that.
But just think about what that does to people subliminally when they hear something like that, right. Galileo, you know, one of the biggest believers in the stock sold a portion of his shares to go and buy a Tesla, which means he valued getting that model why and more than he valued that, you know.
I think it was he sold off, he said, like nine to 10% of the shares, right. And this is one of the most respected people in the internet community around talking about Tesla stock, right? You know, these things are all hitting people subliminally or just directly and they’re thinking about this and they’re hearing things about Like I was saying last week, where it’s a no touch.
It’s a dangerous stock to get involved with short term. Galileo sold some shares. You just seeing all this and it’s like, huh, yeah, not sure I want to go out there and buy Tesla stock a, you had a video I put out eight days ago, okay, eight days ago, seven days and 21 hours ago.
And I went on to say in that video that the uptrend in Tesla stock would end within 30 days. Okay, I don’t make a lot of short term stock price predictions, do I okay, it’s very rare when I do, but when I do, I’m highly confident I will be right because I hate making any type of short term stock price predictions, okay, so I was willing to go on record and say.
Tesla’s uptrend, and the stock price will end within next 30 days, and it will start going down. And, you know, obviously, that has now happened. And then on top of that, I did a video was that a month, month and a half ago.
And I said, you know, if you’re thinking, you know, Tesla stocks just going to go to the sky over the next one to two years, I think you’re sadly mistaken. I expect the stock to not do a heck of a lot. I think it’s going to stay in a certain range over the next one to two years.
And it’s just gonna stay in that range. I think Tesla needs a one to two year breather with this stock. We’ll see if that happens. But that’s what I expect with the stock sometimes these stocks they just need breathers man they got you know, they will you know, Tesla stock went up like crazy, like it needs a one to two year breather on the stock.
It can be volatile, it can go up some it can have some really bad days, it can have some really bad weeks, it can have some good days, good weeks, but I don’t think the stock is gonna go a heck of a lot of anywhere over the next one, two years, I think it’s going to kind of stay in a range. Okay, number five of seven reasons why the stock is going down so much.
So fast, is let’s be honest, there’s some Long’s that are taking profits in this stock. Okay, imagine how many people are up 1000s 10s of 1000s, hundreds of 1000s or millions of dollars on tests a stockade, some of those people are going to be a little tempted to guess what, you know, take some profits, okay.
And the private group, right? We have, I think it’s like 2600 2700 members in there. Okay, I can almost guarantee you at least 1000 to 1500 of the members in the group actually own some portion of Tesla stock. And most of those individuals are up 10s of 1000s, hundreds of 1000s or millions of dollars on those positions.
Okay, I can almost guarantee you there’s some profit taken from some individuals, some are like I’m not selling any shares. That’s great. Okay, you got that portion. But definitely you’ve got another portion that they’re like I’m getting out of stock completely, or I’m just going to sell 5% 10% 20% of my shares because it has gone up so much so fast.
A lot of people want to diversify wealth, they want to buy you know, do different things. So the stock has been a game changer for so many people out there. I mean, absolute game changer for people’s wealth.
And we’re not talking about a small amount of people we’re talking 1000s if not 10s of 1000s of people have you know, partially had their life changed for the much better because of Tesla stock. Some of them are like we got to diversify wealth around Okay, remember, remember we talked about galley, right so nine to 10% of his position.
I believe right to buy that model y how many people were thinking like Galileo over the last week or two okay. Or if not three weeks, a lot of people I can guarantee you there’s a lot of people that are looking at that test gains and saying, Man.
I would love to go buy a Tesla with some of that money or I would love to go buy a house uses some of this money as a down payment or I want to go buy some other stocks out there things like that. I can guarantee you there’s a lot of people that are thinking exactly like that and they’re like.
I’m going to sell some of my shares out there take some profits on this and redeploy the money in something else Okay, it’s just it is what happens okay, it happens with all stocks that go up huge because some of these are game changers it’s just aren’t you when it comes to Tesla stock it’s a whole other level of Game Changer.
Because how many people retail investors got involved with this stock and make crazy money okay, reason number six of seven why Tesla stock is going down so much so fast. Is the NASDAQ is going down so dang fast right now. Okay. The Nasdaq all of a sudden was went from you know, the hottest thing out there to the coldest thing out there. Okay.
The Nasdaq has fallen over 10% in the past three trading days. 10% in three trading days. Look at NASDAQ today NASDAQ was down over 4% here today, okay, I mean, that’s not a simple move. Let’s be very clear about this when you’re talking about a 10% plus move in three trading days.
That is serious. And keep in mind even if you go back four trading days ago, even though the NASDAQ was down that day, a ton of the hot stocks in the NASDAQ were down huge and so we’ve had four straight trading days now where a ton of those high growth you know hot stocks in the NASDAQ are down huge.
And once again the NASDAQ in general is down 10% plus in a matter of three days. Okay. And what happens when you have the market turn like this is a stocks that went up the most and were benefitting by the NASDAQ going up so much guess what goes down the most those exact same stocks.
I’ve seen this time and time again in the stock market when the stock market will be super hot. growth stocks go up way more than all the stocks okay they way outperform to the upside. But man, when you get in a market that also starts to downtrend in a major way.
Those are the stocks that start getting hit 3040 5060 70% Okay, it’s not Coca Cola and Pepsi that are going up, you know, in doubling up in price and doubling up in price in a hot market. No. Okay. And guess what? It’s not Coca Cola and Pepsi that are going down 50% 60% 70% in a down market. Okay.
It’s the hot growth stocks. Okay. And guess what? Tesla’s it’s one of those super hot growth stocks. And that’s why you see this stock in three trading days, sell off over 30%. Okay, that is not normal. There are very few stocks that fall over 30% in three trading days.
I can assure you of that. Okay, reason number seven, why Tesla stock is selling off so much. So fast has to do with big funds, okay, I’m talking about investment funds, hedge funds, ETFs, things like that, okay, a lot of those big funds are forced to sell a lot of ETFs are forced to sell.
Okay, keep in mind, a lot of these funds and ETFs have rules around them, where basically, they can’t have certain positions be, you know, too big in their portfolios, okay. And a lot of them will have like a 10% limit max in terms of position sizing out there.
So when you have a stock like Tesla, let’s say you had 6% or 7% of your of your portfolio in an ETF, let’s say or a big fund or something like that in Tesla stock, and then all sudden Tesla goes up, you know, the doubles or triples up, no sudden Tesla stock could be like 10% 15% 20% of your fun.
And if no stock supposed to be bigger than 10% that fund What are you forced to do is big fun. You have to sell it’s not like you’d be like, well, it’s tough to stock so let’s just make a special rule around that.
No, if you have a fun Do you have an ETF and it’s like we you know our rule is max of 10% of our portfolio in a particular stock or 5% you have to sell there’s no like other way around. It’s like okay, this stocks too big now on our fund, we have to sell some shares and redeploy that money elsewhere.
Okay, and you definitely definitely have some of that going on some of those forced sell situations from some of these funds because it just grew to to bigger positions. Okay, on top of that, you have some funds ETFs things like that that want to just take some dang profits in this as well remember remember.
It’s not just about the you know, that retail investors looking at the stock and saying I want to take some profits there’s a lot of other people out there looking at the stock and saying I want to take some profits when I say other people I’m talking about big funds fund managers things like that they’re looking at this like working cap has gone up like crazy on Tesla stock.
Let me take some profits let me book some profits their stocks probably you know, gonna downtrend for a while it’s probably gonna you know, have some some some heavy selling in it. So let me go ahead, take some profits out of this, redeploy that money elsewhere, or maybe in Tesla stock if it goes down enough, right?
You don’t think about things like that. Okay, so I hope you guys enjoyed today’s video. As always, let me know if you want me to do a video tomorrow where I see Tesla start going next I could do you know that would be kind of a natural follow up to this video.
So let me know if you’d like me to do a video like that. I’ll kind of read through the comments and see if you guys are interested in something like that. Hope you guys enjoyed today’s video. As always, if you don’t mind smash the thumbs up that helps the YouTube channel out in a massive way.
And I appreciate each and every one of you that always smash that thumbs up. Also if you want the opportunity to learn directly from me on how to make more money in the stock market while taking less risk thought the application below that as a first link in the description down there.
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