Tesla Stock's 21% Drop On Tuesday Is Its Worst In History

Tesla Inc TSLA shares fell over 21% at Tuesday's closing — marking the worst day of declines for the automaker after it was left out of the prestigious S&P 500 index.

What Happened: The decline in the Elon Musk-led company shares' trading price saw its market valuation fall $82 billion to $307.7 billion. The stock has risen nearly 295% year-to-date.

Even though Tesla has achieved four consecutive quarters of profitability as of its July results, the company failed to make it to S&P 500.

This week, the company sold $5 billion in new stock in order to raise capital.

In late August, the automaker’s stock underwent a 5-for-1 split, which led to a closing price of $442.68 at the time from prior closing of $2,238.75. 

Why It Matters: GLJ Research analyst Gordon Johnson assigned a sell rating on Tesla with a $19 price target, citing poor earnings quality leading up to the S&P 500 listing failure.

The company’s frequent capital raises, demand problem, and an undefined accounts receivable balance even as sales have declined are some of the other reasons the analyst cited for his rating.

Tesla Price Action: Tesla shares closed 21.06% lower at $330.21 and further fell 1.85% in the after-hours session to $324.15.