Tesla is now down 38% from its peak and appears to be suffering the same fate as many other momentum stocks before it. In order to help chart what $TSLA’s decline could look like, below is a list of the number of weeks that it took 11 other broken momentum stocks to lose 50% of their value from their peak.
It took these stocks 12 weeks on average to lose half of their value. If Tesla matches that pace it could be below $100 by mid December. On average, these stocks lost 91% of their value before their declines were over and the average duration of decline from peak to trough was 100 weeks (about 2 years).
Of course for every example here there is probably another example of a momentum stock that appeared to break but then recovered. Chipotle and Monster Beverage are two that come to mind that came close to 50% declines before recovering. Indeed, several of the stocks on this list (Netflix for example) have recovered quite a bit from their drawdowns. In the end though, valuation always wins.