Tesla stock hit hard by coronavirus fears and broad market selloff

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Source : MarketWatch

Tesla Inc. stock fell more than 7% Monday amid a broad equity selloff triggered by fears the spread of the COVID-19 virus might tip the world into economic chaos.

Tesla TSLA, -6.81%  shares traded at their lowest level in 10 days and are on pace for their largest one-day percentage decline since Feb. 5, when the stock lost 17.2% following a couple of ratings downgrades. The Dow Jones Industrial Average DJIA, -3.18%  fell more than 950 points on Monday.

The COVID-19 outbreak in China has been called “a clear headwind” for Tesla, which has pinned a lot of its expansion plans on the Chinese market and the performance of its Shanghai factory. It also takes the company farther from the inclusion of its stock in the S&P 500 index. SPX, -2.98%  

he virus’s spread is more of a concern for Tesla than many other auto makers because the company’s near-term vehicle production and earnings growth are both “so dependent on its new China factory,” said Garrett Nelson, an analyst with CFRA.

“The fact is that Tesla has much greater asset concentration risk than other, more diversified competitors,” he said.

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