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Tesla (TSLA) stock price fell drastically yesterday following the oil prices. Some experts think this may be the beginning of the end for the automaker. However, today TSLA is in the green.
Tesla Inc (NASDAQ: TSLA) stock price fell sharply on Tuesday. Sources say that the stock prices fell by up to 9.7%. The reason behind this Tesla stock price drop couldn’t be far-fetched: the WTI oil futures contracts fell to zero yesterday. All major performing stocks (including the all-weather ones) fell to zero. This massive drop has arisen as there is zero demand for oil deliveries. Most of the global petroleum industry has virtually zero storage due to the lack of consumption. This is hitting other industries hard as the global movement restrictions continue to hit home.
At the time of writing, Tesla (TSLA) stock price was at $703.19 which means that today the price is rising (+2.40%).
Many pundits think that Tesla (TSLA) stock prices will continue to fall. They attribute this to the fact that oil prices are zero or even lower right now.
They have forgotten that the world will return to normal and everything will bounce back. This will happen after all is said and done about the COVID-19 situation. That said, it is what will happen post-COVID-19 that will shock such pundits.
The world economy as it is is already in bits. Cheaper alternatives and lifestyle patterns are emerging across the board. Even as oil prices rise, people will still think of the long-term effects of owning combustion engines.
This is where Tesla holds its appeal.
Tesla (TSLA) Stock May Continue Falling Due to Oil Prices Drop
While bears such as Gordon Johnson continue to believe that Tesla stocks will crash permanently, they forget the flipside of events. Tesla has a lot going for it as a company. They have an unparalleled advantage as per intellectual property in the electric vehicle market. Tesla has beaten every other competitor’s hands down to take the number one spot as EV maker.
Top Tesla bear Gordon Johnson believes that the Musk-led company will drop prices by more than 90% due to the massive drop in oil prices. Johnson also believes that the average consumer will choose his or her pocket rather than the environment.
A massive crash in Tesla (TSLA) stock price is said to be possible. While that may be in the offing, the general truth is that there is also a tendency for the financial markets to go the same way. The influence from the side of the oil market is not exclusive to Tesla.
The markets are sure to recover once the COVID-19 situation gets a vaccine, cure, or an effective treatment regimen. Then the true state of things will indeed appear. Tesla’s prices have remained steady even as oil contracts drop.
The oil glut won’t remain in the same position. Things may go from bad to worse for everybody for a few months but after that, recovery will occur.
China May Come to the Rescue
Another factor working against the naysayers is the Chinese love for Tesla stock.
The Chinese have fallen head-over-heels for Tesla’s products. The recent sales report has shown a significant increase in orders from China. It also comes as China returns to the business. This is also a pointer to what may happen after the dust settles because of COVID-19.
Situations such as COVID-19 are disruptions in the regular pattern of doing things. Cheap gasoline will come but it will go. It is innovations such as Tesla’s that will drive the markets in this decade.
The price dip that Johnson is predicting is the most likely support for Tesla (TSLA).