Tesla Motors Inc (NASDAQ:TSLA), Netflix, Inc. (NASDAQ:NFLX) and other big momentum stocks are getting hit hard today in trading as overall sentiment began to fall. Shares of Tesla declined more than 4%, while Netflix fell nearly 8% in afternoon trading.
Tesla, Netflix “getting smacked”
According to Reuters (via CNBC), analyst Todd Salamone said momentum stocks are “getting smacked” today. He notes that there are several equity benchmarks coming this week around highs hit earlier this month. He believes that “profit-takers” could be wanting to lock in some of the gains they received from their investments before the end of the quarter this week.
In premarket trading this morning, futures were higher as investors hoped China would begin economic stimulus efforts. However, indexes moved lower early in the day as behemoths Tesla Motors Inc (NASDAQ:TSLA) and Netflix, Inc. (NASDAQ:NFLX) especially dragged on the NASDAQ.
Netflix, Tesla were big gainers
Analysts note that the stocks which were most hit today are those which have gained significantly over the last year or so. Such stocks are considered riskier trades than others, which is why investors tend to pull money from them more quickly than from other places. Netflix, Inc (NASDAQ:NFLX) was the largest percentage gainer last year, and Tesla Motors Inc (NASDAQ:TSLA) soared 344% last year.
Meanwhile Wall Street has become increasingly concerned about the increasing tension in Ukraine. The nation has withdrawn from Crimea, essentially giving it up to Russia, which invaded earlier this month. The U.S. and Europe are now considering how to respond to the heightened tensions.
Doug Kass covers Tesla short position
Today Doug Kass noted Tesla Motors Inc (NASDAQ:TSLA)’s decline and said he was taking in some of his short. He wrote on his Real Money Pro investing diary that Tesla had become a profitable short sale for him and that he had exited his short position on the automaker. He also discussed why he was taking it off his best ideas list and said he would discuss Tesla further if shares move higher again.