Why Tesla Stock Dropped Monday Morning
Tesla (NASDAQ: TSLA) shares have started off the week on a negative note. As of 12:10 p.m. ET, the stock was off its session low, but still down 1.8%. The drop comes as the market is also continuing a downturn that started last Friday with a 1,000-plus point drop in the Dow. But there was also news out this morning that could have investors wondering if Tesla's valuation is too high.
With a market cap of almost $900 billion and a trailing-12-month price-to-earnings (P/E) ratio above 90, investors have baked a lot growth into Tesla stock. A report from The Wall Street Journal that Honda and South Korea-based LG Energy Solution plan to build a new $4.4 billion electric vehicle (EV) battery factory in the U.S. may have investors realizing that an increased level of competition isn't that far away for Tesla.
Source Fool.com
