Tesla extends Thursday's 5% sell-off as pain continues for the tech sector
- Tesla falls another 4% following Thursday's 9% decline in which the Nasdaq-100 fell by more than 5%, its sharpest one-day drop since March.
- Tesla's biggest shareholder, Scottish asset manager Baillie Gifford, was forced to trim its stake in the company due to new internal rules limiting the weight of certain stocks in portfolios this week.
- Tesla's 5-for-1 stocks split came in effect on Monday and the company is looking to raise $5 billion in a share sale.
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Shares in luxury electric vehicle maker and stock market favorite Tesla fell by as much as 5% in early trade on Wall Street on Friday, set for a fourth straight day of declines, the longest since the depths of the coronavirus crisis in mid-March.
It is was last down around 4% at $390.50 as of 10:15 am. ET, while the Nasdaq 100 was down 1.75% on the day, under pressure from government data that showed the US economy created fewer jobs than expected last month. The monthly non-farm payrolls report showed a rise of 1.371 million, just shy of a forecast for 1.4 million.
Tesla, which has risen by over 400% so far this year, fell by 9% on Thursday, alongside the FAANG stocks- Facebook, Apple, Amazon, Netflix, and Google parent Alphabet - which tanked after rallying through the start of the month and enjoying historically expensive valuations.
As a result, the Nasdaq-100 experienced its sharpest one-day drop since March, with a drop of 5.2%. On Friday morning, the index was last down 1.6%, compared with a more modest 0.3% fall in the S&P 500.
It has been a volatile week for Tesla. Its shares fell 6% on Wednesday, after Baillie Gifford, the company's largest shareholder, said it had trimmed its stake in the company because of internal rules constraining the weight of a single stock in client portfolios.
Tesla's 5-for-1 stocks split went into effect on Monday, and on Tuesday the company announced plans to raise up to $5 billion in a share sale.
Many market watchers think tech stocks have risen too aggressively, and a correction was inevitable, but most are still bullish on the outlook for Tesla stock.
Bank of America this week raised its target for Tesla's price from $350 to $550.