February 5, 2020
Tesla shares dive, giving back some gains from rally
Tesla shares dived around 20 percent in early afternoon trading Wednesday, giving back some of the gains the electric-car maker racked up since October.
Shares stood at $723.92, down 18.3 percent around 1835 GMT, reversing a nearly unbroken trend over the last four months that accelerated this week when the stock jumped more than 36 percent in a two-day surge.
Tesla's rally has followed a period of solid performance that has seen it meet key benchmarks on production of its all-electric cars and the opening of a plant in China, a crucial market.
But Canaccord Genuity downgraded Tesla from "buy" to "hold," while maintaining a $750 target for the stock.
"We see a balanced risk reward for investors to lock in profits," Cancaccord said in a note.
"Just as we observed a clear buy signal coming into 2020, we see the risk of China's coronavirus as a clear headwind to the Shanghai facility, suggesting a more pragmatic position."
And J.J. Kinahan, chief market strategist at TD Ameritrade, warned of "incredible volatility."
"When I first started trading futures, an old guy said to me, "Be careful of chocolate covered hand-grenades," Kinahan said. "That's a little bit how I feel about Tesla at the moment."
© 2020 AFP