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Why Tesla, Dell Technologies, and Camber Energy Slumped Today

Dan Caplinger, The Motley Fool

Wall Street got the opposite of a Santa Claus rally on Monday. Instead of seeing their typical holiday-season move higher, major stock indexes continued to lose ground, falling another 2% to 3%. An assertion from the Trump administration that financial institutions "have ample liquidity" only got investors thinking about whether they should've been worried about such concerns, further hurting an already dour mood. Bad news from certain companies added to the gloom. Tesla (NASDAQ: TSLA), Dell Technologies (NYSE: DVMT), and Camber Energy (NYSEMKT: CEI) were among the worst performers on the day. Here's why they did so poorly.

Tesla takes on taxes, price cuts

Tesla shares fell 8% after a couple of comments pointed to higher expenses for the company. The automaker said that it had reduced prices on some of its Model 3 vehicles for sale in China by as much as roughly 8%, bringing starting prices to around $72,000. At the same time, CEO Elon Musk said that if Tesla buyers miss out on tax credits due to delivery delays, then the company will make up the difference through cash payments. Both moves could hurt profits, although the tax-credit decision is important to avoid alienating customers who took the company at its word in placing orders.

Dark-colored Tesla Model 3 vehicle on a road in front of an open landscape of rolling hills and layered clouds.

Image source: Tesla.

Dell reorganization moves forward

Dell Technologies' stock plunged 22%, but the net impact wasn't as dire as one might otherwise think. Shareholders owning the current Class V shares had until just after Friday's close to elect whether to accept $120 per share in cash or a certain amount of to-be-issued Class C common stock in exchange for their current stock. Although nearly all shareholders elected to get cash, the deal was subject to a maximum cash component of about 59%. That means that shareholders will be forced to accept a pro-rata mix of cash and stock, and the shares trading on the exchange today won't be able to elect cash at all -- reducing their value substantially compared to what they were worth on Friday.

Camber's reverse split goes through

Finally, Camber Energy shares dropped 10%. The energy company said that its previously announced 1-for-25 reverse stock split took effect on Monday, taking it out of the realm of penny stocks and allowing it to remain listed on major stock exchanges. Prior to the reverse split, Camber had traded below $0.10 per share, but by replacing every 25 old shares with 1 new share, the price multiplied 25-fold. However, investors still believe that Camber will remain under pressure due to low energy prices, and many reverse splits prove to be last-gasp efforts that fail to prevent companies from seeing their stock become worthless.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.