Tesla lost $200 billion in market capitalization in one month

Shares of the electric vehicle manufacturer Tesla had, from the beginning of the year until July 19, an increase of 170%, after which they lost about a fifth of their value, according to Business Insider.

The decline sent the stock valuation of the company founded by Elon Musk down nearly $200 billion to $730 billion based on Tuesday's closing prices. The drop came against a backdrop of high inflation, higher interest rates and fears of the United States entering recession, with investors now awaiting a speech by Federal Reserve Chairman Jerome Powell tomorrow to identify his next steps. the central bank of the USA will do, the quoted source also mentions.

The Fed has already raised interest rates from near zero to 5% over the past year and has not ruled out another hike this year. Under these conditions, there are fears in the market that further increases in funding costs will trigger a recession, given that inflation is not much above the US bank's long-term target of 2%.

In general, higher interest rates tend to have a negative impact on growth stocks like Tesla, as more expensive financing erodes profitability. Higher interest rates also raise bond investment yields, which drives investors away from stocks because they have the alternative of safer investments with comparable returns.

But Tesla's problems can also have internal causes. Gordon Johnson, founder and managing director of Canadian consulting group GLJ, pointed out in a Twitter post that the company's stock is "exploding."

Or, such a situation may force Tesla to reduce prices again, according to the director of GLJ. Since Cathie Wood said on CNBC on June 9 that Tesla shares could be worth $2,000, Ark Invest has reduced its holding in the company by 936,000 shares, or nearly 18 percent, Johnson said.

"Looks like even your biggest supporter is losing hope," the founder of the consulting group wrote to Musk, according to Business Insider.