Why Tesla Stock Fell Sharply on Thursday

What happened

Shares of Tesla (NASDAQ: TSLA) took a hit on Thursday, declining as much as 7.3%. By the time the market closed, the stock was down 5.6%. The decline happened even as the S&P 500 rose 2%.

Shares of the electric-car maker were likely down because of comments from short-seller Jim Chanos during an interview with CNBC on Thursday. 

A chalkboard sketch of a chart showing a stock price declining

Image source: Getty Images.

So what

Chanos, who has been a Tesla critic for years, confirmed on Thursday that his firm was still short Tesla, even with shares up 85% in the past six months: "We are still basically maximum short Tesla. It's still one of my favorite positions." 

He likened the stock's recent run-up to the excitement for hot stocks toward the end of the dot-com boom.

Now what

Though Tesla is one of the few stocks with a positive year-to-date return, it's come down sharply from recent highs. In February, the stock soared as high as $969. But shares have declined sharply since then, partly reflecting a breather after a torrid run, and partly due to concerns about COVID-19's impact on Tesla's business.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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