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What was the Worst Performing Mega Cap Stock in October?

Smith and Co. - Tue Oct 31, 2023
Green Energy (EV, solar, etc.) - charging - andrew-roberts-2JvEjF0tf50-unsplash

A mega cap stock is a stock of a company with a market capitalization of over $200 billion. Market capitalization is the total value of a company's outstanding shares, calculated by multiplying the number of shares outstanding by the price per share.

Mega cap stocks are some of the largest and most well-established companies in the world, and they often have a significant impact on the overall stock market.

The worst performing mega cap stock in October was Tesla (TSLA). The electric vehicle (EV) stock traded 20% lower this month.

Tesla stock has been going down for a number of reasons, including:

  • Concerns about a slowdown in EV demand. Rising interest rates and inflation are making cars more expensive, and this could dampen demand for EVs. Additionally, some automakers have been warning of a slowdown in EV sales, and Tesla's battery supplier Panasonic has cut battery production due to a decline in demand for high-end EVs.
  • Elon Musk's acquisition of Twitter. Musk has been selling Tesla shares to finance his acquisition of Twitter, and this has weighed on the stock price. Additionally, some investors are concerned that Musk's focus on Twitter will distract him from Tesla.
  • Increased competition. The EV market is becoming increasingly crowded, with new competitors emerging all the time. This could make it more difficult for Tesla to maintain its market share.
  • Valuation concerns. Tesla stock is still trading at a relatively high valuation, even after its recent decline. This means that some investors believe that the stock is overvalued and could fall further.

It's important to note that Tesla is still a growing company with a strong brand and a loyal customer base. However, the factors listed above are weighing on the stock price in the short term.

Here are some additional factors that may be contributing to Tesla's stock decline:

  • Production delays. Tesla has experienced some production delays in recent months, which have hurt its ability to meet demand.
  • Quality issues. Tesla vehicles have been plagued by some quality issues in the past, which have damaged the company's reputation.
  • Regulatory scrutiny. Tesla is facing increasing regulatory scrutiny from governments around the world. This could lead to higher costs and/or decreased sales.

Overall, Tesla is a complex company with a lot of moving parts. It's difficult to say definitively why the stock is going down, but the factors listed above are all likely playing a role.

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