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Despite a fall of Tesla (TSLA) stock by 1.72% on Wednesday and by 7.88% in the premarket today, the company is now ranked highest-valued U.S. industrial company after overtaking Boeing.
Tesla Inc (NASDAQ: TSLA) made headlines on Wednesday after its market capitalization hit $114 billion, surpassing the value of Boeing Co (NYSE: BA) which is at $110 billion. This now means Tesla is the company that is ranked the highest U.S. industrial company in terms of capitalization. However, the stock market did not move at per with the news as it shed 1.72% during the Wednesday intraday trading. Moreover, in the premarket, it is almost 8% down. TSLA is at %584.25 at the moment of writing.
Boeing has had a rough time staying afloat in the last one year. Since the company launched its Boeing 737max that has been marred with fatal accidents, its stock value has been declining by the day.
Last year a time like now, Boeing had a market capitalization of about $200 billion, with the stock trading at around $430. Over the period up to now, the stock market sharply declined to trade at $189 (-18%) on Wednesday. In the premarket, BA lost even more. Now it’s 6.61% down.
According to Boeing, the ongoing coronavirus outbreak has severely affected its operations, which in turn will affect the revenue returns. Since the coronavirus outbreak began, the company has been canceling flights at an alarming rate. On Wednesday, the company reported that the cancellation made had surpassed the orders made in the month of February alone.
As a result of poor performance, Boeing has resulted in halting all hiring processes and also overtime works. This will, in turn, help the company preserve the cash at hand and use it to maintain it during these tough times.
On the bigger picture, it seems the company of Elon Musk is winning the hearts of most investors at this time of uncertainty. However, Tesla has previously been reported to enjoy speculative trading from influential people in social media.
Good thing for Tesla and TSLA Stock
Since mid-February, Tesla (TSLA) stock value had shed almost 30%. This is after moving from retesting the all-time highs, $936 to the value of $634.23 at the previous trading session. As an electric automobile company, Tesla has been affected by both coronavirus and the recent oil production war.
Coronavirus made its China factory, the largest, closed for almost two weeks. The closure delayed most deliveries set for February, hence causing customers to wait till later dates. On the other hand, cheap oil prices have made Tesla less attractive to most investors who are enjoying cheap fuel prices.
However, Elon Musk went to Twitter to announce the company is set to open a gigafactory in the central USA to assemble its Cybertruck. In addition, Musk announced on Wednesday that the Model Y production is set at the east coast. Now, with the official announcement that Tesla has overtaken Boeing in capitalization to take the first position, well, it might have sparked the much-needed catalyst to push the stock and valuation up.