Tesla Motors has begun to produce its goal for Model 3 Teslas as CEO Elon Musk sleeps at the factory. Photo: Steve Jurvetson via WikiCommons
Market Forces Roil Tech Stocks in Turbulent Week
Technology stocks dropped, surged and dropped again this week as the market responded to a myriad of influences—both market-based and political.
Among the negative impacts: the President’s inaccurate tweets critical of Amazon’s use of the postal service for shipping and a report by Tesla that a car crash involved its Autopilot driving system following delays in hitting its Model 3 Tesla’s production goals this year. According to Bloomberg Businessweek, Tesla’s Model 3 is now the bestselling U.S. electric car, delivering 8,180 in the first three months compared to 6,468 for the Toyota Prius and 4,375 for the Chevy Bolt.
Positive developments included a direct listing by the music streaming service Spotify that created a valuation of $26.5 billion, and the further investment into Dropbox by investment banks that underwrote its IPO last month. In addition, news that Tesla was close to hitting its goals for Model 3 production, making 2,030 of the cars⎯close to the planned 2,500 in the past week⎯helped stabilize the stock.
According to CNN.com, President Trump has attacked Amazon because he has a personal vendetta against its CEO Jeff Bezos, whose newspaper The Washington Post has been a sharp critic of his Administration. Amazon stock fell 7% and lost $60 billion in market value in the days following the attacks.
In a letter to investors quoted in Wired.com, Tesla said, “This is the fastest growth of any automotive company in the modern era. If this rate of growth continues, it will exceed even that of Ford and the Model T.”
According to VentureBeat.com, Dropbox’s IPO raised $776.7 million for the company, but the latest investment totaled $113 million that went to the company and insiders selling their personal stock. Dropbox is valued at $12.4 billion.
A day after Spotify’s listing, Forbes.com ran a story entitled “3 Reasons Not to Buy Spotify Stock,” listing them as: 1. Spotify is not turning a profit and may not ever; 2. Spotify’s revenue growth might slow down due to deep-pocketed competitors; 3. Spotify has not demonstrated that it can win the quarterly beat-and-raise game. That day, the Swedish company’s stock dropped from its second day pricing of $149.01 to close at $144.22 per share.