This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
What happened
Tesla (NASDAQ: TSLA) shares continued a recent slide, hitting a two-year low Monday. As of 2:25 p.m. ET, the stock was down 6.8% to about $168 per share. That's the lowest level since November 2020.
The reasons for today's decline are some of the same that have contributed to the more than 40% drop in the stock over the last three months. But there are some new developments as well.
So what
Investors have been shedding Tesla shares as CEO Elon Musk has had to sell some of his own this year to fund his Twitter acquisition. Musk has sold about $19 billion in total related to the Twitter purchase in 2022. He has also had to put his time and energy into the social media company recently.
Today's drop also can be attributed to a newly announced recall, as well as renewed concerns over COVID-19 restrictions in China.
Now what
China announced three COVID-19 deaths in its capital, Beijing, over the weekend. That marked the first official fatalities attributed to the virus in China since May. As cases continue to increase, authorities also locked down the most populous portion of the large southern port city of Guangzhou. Tesla's largest plant is in Shanghai, and investors fear an interruption in sales from that facility could have noticeable impacts on the company's fourth quarter.
It also didn't help investor sentiment when a recall of 321,000 Tesla vehicles in the U.S. was announced over the weekend. That said, the news was more of a headline than a concern for impacts to the business, however. The recall was for a rear taillight issue that the company will fix with over-the-air updates.
But investors see several things piling on right now, and Tesla stock still holds a high valuation by traditional metrics. Its price-to-earnings (P/E) ratio remains above 50 on a trailing-12-month basis. So the recent news affecting the business and the brand is moving the stock lower and lower. For long-term investors, that could be an opportunity to begin dipping into the stock, as the business' prospects continue to grow.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
