TSLA: Tesla Stock Wipes Out 13% as Fed's Powell Spoils Weekslong Post-Election Rally

Elon Musk waved goodbye to $42 billion in net worth this past week as frothy shares gave up some of the big Trump-pump gains.

• Tesla stock TSLA wrapped up the week losing as much as 13% from its record high valuation as traders reassessed the overblown price gains in a weekslong post-election rally. Shares of the EV maker hit an all-time closing high of $479.87 a share on Tuesday (valuing the company at $1.5 trillion), but couldn’t sustain the fragile upside swing and took a dive to a Friday close of $421.06 (erasing $200 billion with the move). Turns out, there was a lot of froth that got exposed when Fed boss Jay Powell addressed the markets.
• The US Federal Reserve cut interest rates on Wednesday and sent a clear signal that this party was about to end. Powell said policymakers were thinking of cutting interest rates just twice next year, a downward revision from a prior projection of four. It wasn’t good news for Tesla — higher interest rates make borrowing more expensive and lots of the electric cars are purchased with a bank’s financing. In other words, higher rates hurt sales.
• Future sales weren’t the only thing to get hurt. Elon Musk’s net worth got zapped, too. The billionaire-turning-politician waved goodbye to $42 billion as his personal fortune skedaddled to $444 billion from $486 billion. Musk, who’s become Donald Trump’s main man (or is it the other way round?) saw his billions skyrocket by $180 billion after the President-elect won the White House on November 5.