Tesla's stock faced significant pressure on December 18, 2024, as the market reacted to a combination of factors impacting its valuation. The company's recent rally, driven by optimism surrounding its autonomous mobility prospects and close ties to the Trump administration, has been met with skepticism. Analysts have raised concerns about the sustainability of Tesla's valuation, particularly in light of potential execution risks in its Full Self-Driving (FSD) technology and robotaxi initiatives. Additionally, the broader tech sector experienced a pullback, with the S&P 500 dipping below 6,000 following the Federal Reserve's rate cut and new projections, which added to the market's cautious sentiment.
Tesla's implied volatility levels have surged to 90%, reflecting heightened market uncertainty. The options market has seen a significant increase in activity, with a notable rise in bearish bets against Tesla. Large investors have placed substantial wagers on Tesla's stock declining, further contributing to the downward pressure. This bearish sentiment is compounded by the broader market's concerns over the sustainability of the recent growth stock rally, with Tesla being a major contributor to the gains.
The Graniteshares 2x Long TSLA Daily ETF (TSLR) dropped to $52.47, marking a 16.14% decline from the previous close.