Tesla Loses $4 Billion In Market Cap In October

Tesla Motors Inc (NASDAQ:TSLA) releases its next earnings report on Tuesday, and the automaker’s shares had a tough October. CEO Elon Musk has expressed his concern that investors were pushing Tesla’s stock so high, and this makes sense since investors appear to have gone way off the deep end with expectations.

Tesla Loses $4 Billion In Market Cap In October

Personally, I really like Tesla, but I’m with Musk. It’s getting hard to see how the company can keep beating expectations which appear to have gotten out of control.

Tesla saw its largest one-month loss in October

Bloomberg’s Alan Ohnsman reported on Friday that Tesla Motors Inc (NASDAQ:TSLA)’s losses in October were the largest in a month. The automaker’s shares fell 17% during the month, recording their first monthly decline since February and their largest since December of 2010. The market capitalization of the automaker fell to $19.4 billion during October after hitting its peak only about a month ago. On Sept. 30 Tesla’s market cap peaked at $23.5 billion.

The $4.1 billion decline in Tesla’s market cap is bigger than the $4 billion the automaker was worth at the beginning of this year.

Tesla faces challenges

Tesla Motors Inc (NASDAQ:TSLA) has managed to beat all the odds stacked against it, but there are more challenges ahead. The company must continue boosting production and push the Model S in Asia and Europe in hopes that its popularity will rise as quickly as it has among the wealthy in the U.S. The company is also increasing its number of showrooms and adding the Model X crossover vehicle. Meanwhile, the automaker has to keep all of these plates spinning while avoiding any major missteps which could hurt its reputation.

Some analysts suggest Tesla could start burning cash like mad in 2014 as it develops and begins building the Model X and then the Generation III vehicle. It takes cash to develop more vehicles, and in order to sustain a long-term business, the automaker must develop these other vehicles. It’s a cycle which will keep on going as Tesla Motors Inc (NASDAQ:TSLA) pushes toward becoming a new powerhouse in the auto industry.