It has become a regular occurence. Nearly every day, someone will ask me, "Have you seen what Tesla is doing? What's driving it?"
They're not talking about the latest marketing move or innovation from the electric car company. No, they're talking about TSLA, a stock that has had an amazing two-month surge: 174 percent. So incredible, many people seem to have lost sight of its volatility.
When Tesla shares dropped more than 13 percent in early trading Wednesday, I received the usual questions: Why is Tesla selling off? What caused the plunge in TSLA?
The truth is, nobody knows for sure exactly why TSLA fell after hitting an all-time high of $114.90 on Tuesday. The drop was so dramatic, Nasdaq implemented a short-selling circuit breaker on TSLA to stabilize trading. It's not a common move, but the exchange has taken similar steps with other stocks, like Apple. Shortly after the circuit breaker was implemented, TSLA leveled off.
A wild two-month run
Tesla's rise was fueled primarily by a profitable first quarter that was better than Wall Street expected. After that earnings report, the company's shares took off. What is often overlooked by many watching Tesla's run is that the stock has been soaring and plunging, sometimes by huge percentages. Take a look at the last 43 trading days.
