Tesla Inc.’s stock has grown less connected with those of big U.S. technology firms ahead of the electric car maker’s earnings release. Moreover, Bitcoin might be to blame.
Tesla’s Stock Prices Decline
Tesla’s stock price and the Nasdaq 100 index had a 20-day correlation of 0.14 on Wednesday, down from 0.83 on June 17th. The connection between the EV company’s shares and the NYSE FANG+ index has also declined. FANG+ comprises the top tech companies like Facebook Inc., Apple Inc., Amazon.com Inc., and Netflix Inc. On July 26, Tesla will release its earnings report.
The Elon Musk Effect
After Elon Musk’s positive statements about the largest cryptocurrency, Tesla announced a $1.5 billion investment in Bitcoin in February. Other firms were expected to follow suit; however, thus far, only a handful have. Tesla has subsequently liquidated a chunk of its Bitcoin assets. Additionally, Musk has become a vocal opponent of Bitcoin due to its high energy usage.
This month, Tesla has lost over 4% of its value, while the Nasdaq 100 has gained more than 2%. Bitcoin fell from a high of over $65,000 in mid-April to around $32,500. Due to this investors, demand for speculative assets such as cryptocurrencies has waned.
Amy Silverman comments
Amy Wu Silverman, a derivatives strategist at RBC Capital Markets, noted that Tesla also has an “extremely steep” skew. Which is a measure of how much more expensive bearish options are than optimistic ones.
“This is highly unusual for Tesla, which spends a lot of the time with ‘inverted skews’ because both institutions and retail adore buying out-of-the-money call options in the name.”
