Part 7/10:
External Market Factors and Broader Economic Context
The stock’s decline is also influenced by external forces, like margin calls and tax-loss harvesting. Investors who borrowed against their Tesla holdings to amplify their positions are now compelled to sell shares to cover their loans, accelerating the sell-off. Additionally, some investors are strategically selling Tesla shares to offset gains elsewhere and reduce tax liabilities.
Furthermore, the broader market sentiment appears cautious, especially amid fears of a recession. As a result, Tesla’s stock is being treated more as a cyclical asset, which might not reflect its strong fundamentals or growth prospects.