Tesla shares rally in premarket trading on ‘buy the dip’ bounce

Other electric-vehicle makers also climbed in premarket trading Wednesday: Nikola Corp. gained 3.3%, while Lordstown Motors Corp. advanced 2.6%.

Shares in Tesla Inc. gained in U.S. premarket trading, indicating that investors are buying the dip following a four-day drop that erased the electric-car maker’s year-to-date gains.

The logo of car manufacturer Tesla is seen at a branch office in Bern, Switzerland. (Reuters)

The day-trader favorite rose 2.5% at 6:45 a.m. in New York after rebounding from a drop of as much as 13% during regular hours on Tuesday to close just 2.2% lower. The stock had briefly traded below the level it was when the electric-carmaker entered the S&P 500 Index in December. The Nasdaq 100 saw a similar rebound in Tuesday’s session as “buy the dip” began trending on Twitter, closing just 0.2% lower after a 3.5% slump in the morning.

Other electric-vehicle makers also climbed in premarket trading Wednesday: Nikola Corp. gained 3.3%, while Lordstown Motors Corp. advanced 2.6%.

Cathie Wood’s Ark Investment Management was among investors who bought the weakness in Tesla shares, she said in an interview on Bloomberg Radio. A subsequent email from Ark showed that three of the firm’s exchange-traded funds purchased a total 240,548 shares of the automaker on Tuesday.

Tesla shares are down 1% in 2021, after a 675% rally in 2020.