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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 carmaker’s year-to-date gains.
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 Feb. 23 to close just 2.2% lower. The stock had briefly traded below the level it was when Tesla entered the S&P 500 Index in December. The Nasdaq 100 saw a similar rebound in the Feb. 23 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 Feb. 24: 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 Feb. 23.
Tesla shares are down 1% in 2021, after a 675% rally in 2020.
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