Tesla stock plunged 21% on Tuesday, wiping $82 billion from the electric-vehicle maker’s market capitalization.
The share-price decline came after Elon Musk’s company was excluded from the next round of additions to the S&P 500 last week, and a key shareholder cut its stake.
Other tech stocks such as Apple, Microsoft, and Facebook fell by more than 3.5% on Tuesday.
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Tesla stock tanked 21% on Tuesday, slashing the market capitalization of the world’s most valuable automaker to below $310 billion — a decline of more than $80 billion.
Elon Musk’s electric-car maker was caught in a broader sell-off of tech stocks. Apple, Amazon, Microsoft, Alphabet, and Facebook fell between 3.7% and 6.7% during regular trading hours.
Tesla’s stock plunge could also reflect its shock exclusion from the S&P 500 index. The company turned a fourth consecutive quarterly profit in the three months to June 30, meeting the last of the benchmark’s eligibility criteria.
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Many investors expected it to be drafted into the index as a result, especially as it dwarfs most S&P 500 companies in terms of market capitalization.
However, S&P Dow Jones Indices — which manages the S&P 500 — dashed those hopes on Friday by announcing Etsy, Teradyne, and Catalent as the latest additions to the index, replacing H&R Block, Coty, and Kohl’s. It made no mention of Tesla.
The committee may be wary of including Tesla given its volatile stock price, which had skyrocketed 400% this year and hit record highs. The automaker’s first-half profits were also flattered by $782 million in sales of regulatory credits to other companies.
Tesla’s stock drop comes after its five-for-one stock split and completion of a $5 billion share sale last week. Its largest external shareholder, Baillie Gifford, also disclosed that it cut its stake from about 6.4% to 4.3% because of internal limits on the weight of a single stock in its client portfolios.
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