Tesla Motors Inc (NASDAQ:TSLA) stock began to sell off after the market opened this morning. The firm’s shares are selling below $170 for the first time since mid-September on this morning’s market. The slow-down in stock might actually be good for Tesla Motors Inc (NASDAQ:TSLA) investors.
Like many other types of mass movement, screaming the word “bubble” increases the chances of there being one. The self-fulfilling prophecy of a market bubble is just part of what causes a stock to crash. Assuming most retail investors are in Tesla for the long run, they should be glad the stock is slowing down.
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Tesla bubble bursting
When Tesla Motors Inc (NASDAQ:TSLA) is spiking, investors are increasingly worried about the company’s prospects. Jittery investors are exactly what bubbles are made of, and they can make it much more difficult for firms to recover after a big fall. If Tesla leaves its bubble slowly, it may avoid the perception that it was ever a bubble company at all, and make it easier for investors to get involved in the future.
Those investors who were betting on momentum in Tesla Motors Inc (NASDAQ:TSLA) stock are going to be disappointed by today’s moves, but there are a swathe of people investing in Tesla because they think the company is going to grow for years. Those prospects are not hurt by a slight drop now, and in fact may be improved by it.
There is no guarantee that the stock will slow down gradually, however, and that is a worry for every investor. Nobody likes to see their portfolio in red numbers at the end of the year, and a massive drop in Tesla Motors Inc (NASDAQ:TSLA) stock could bring about just that scenario. A gradual fall could be good for Tesla, but a drastic drop could be painful.
There is no telling what price Tesla Motors Inc (NASDAQ:TSLA) will find long-term support at. Stock in the company has risen too fast and it’s based on almost nothing except hope in the company’s management. If it grows like its ardent followers are hoping, it will have no trouble regaining the value it has lost in the last week.
Tesla Motors Inc (NASDAQ:TSLA) is down about 15 percent since opening on October 1st. A slow deflation could ease pressure on the firm’s investors and give them time for something other than checking stock prices.