Tesla shares are in reverse.
After gaining 36% in two days, shares of the automaker fell back 15% on Wednesday.
Here's what four experts are watching.
Matthew Patsky, CEO of Trillium Asset Management, says he is concerned over Tesla's valuation.
Value-based investing does not mean ignoring valuation ... We certainly are deeply concerned about the valuation stretch that has occurred here on Tesla and, therefore, have looked for other ways to play what is indeed a major move in the market toward electric vehicles ... People who are not fully exposed to or who might have been light on Tesla relative to the benchmark are feeling they needed to hug the benchmark better and therefore needed more exposure.
Alan Patricof, founder and managing director at Greycroft LLC, says Tesla's popularity is in relation to consumers' familiarity with the company.
Everybody knows the name Tesla. ... It's a consumer favorite, it's talked about, you see it on the street. ... The last year has been all about consumer-known companies that they're consuming. ... Companies that are familiar to the consumers seem to have a lot of attention. ... I've read a lot of the reports about Tesla, and they're talking about what the potential revenue should be in 2030. I mean, they're not talking about 2021. The electric car is still a very small fraction of the total consumption of the country; hybrids are much more popular. Definitely, Tesla has a major share of those that are purely electric.
Jed Dorsheimer, managing director and analyst at Canaccord Genuity, expresses concerns about China's part in the story of Tesla's future.
We are certainly not saying short the stock. When we came into the year ... we had all indicators that were very bullish, and the stock has been much stronger than we initially anticipated. But, one of those bullish signals was the China component to the story. We think with the run in the stock, the fundamentals need to catch up to the stock. ... I do think that we need to be prudent and it would be irresponsible to not acknowledge that a large component of this story which relies on domestic demand in China is at risk right now.
Jim Cramer, host of CNBC's "Mad Money," points out Tesla's competitive success.
I think Tesla went from a company that was going to lose money to a company that makes a lot of money. Ford last night announced that they are going to close six plants in Europe; Tesla's building a plant in Europe. There's demand for one car; there is not a lot of demand for the other. Ford can make all the cars at once, and it'll hurt their earnings. Tesla can make all their cars at once, and it makes their earnings.