Tesla stock drops despite monster market rally

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Elon Musk, chief executive officer of Space Exploration Technologies Corp. (SpaceX) and Tesla Inc., speaks during an event at SpaceX headquarters in Hawthorne, California, U.S., on Thursday, Oct. 10, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Tech stocks rose Friday along with the rest of the market, but Tesla shares sank, and were still in the red after hours after President Trump declared a national emergency over the coronavirus pandemic.

Tesla shares opened on Friday at $595 plunged to $502 at their lowest point in trading. Shares closed at $546.62.

The President’s declaration frees up tens of billions in financial resources to help people and businesses affected by the covid-19 outbreak. The announcement helped stocks see their biggest rally since 2008.

Earlier this week, Tesla shares were down as oil prices fell after a pricing battle between Saudi Arabia and Russia.

Tesla has not issued any statements about employees directly effected by the covid-19 pandemic. Nor has it withdrawn or revised guidance in response to the novel coronavirus. Tesla reportedly sent dozens of US workers home from Germany ahead of a ban that bars travelers from most European countries from entering the US over the next 30 days.

The company previously said it would comfortably exceed sales of 500,000 electric vehicles to customers this year, build a new factory outside of Berlin and ramp up vehicle production at its latest factory in Shanghai, China.

Alameda County Public Health Department in California, which serves the city of Fremont where Tesla operates its main car assembly plant today, had reported seven confirmed cases of covid-19 as of Thursday. 

Uncertainty around the impact of covid-19 to its automotive and solar business, and an imminent high-stakes trial weighed on shares of Tesla Friday, amid continued market turmoil sparked by the pandemic and oil price wars. 

On Thursday, Morgan Stanley’s Adam Jonas cut his price target for Tesla to $480 from $500, and slashed his expectations for Tesla vehicle deliveries to 452,000 units in 2020.

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