[jerrytsai]

Like with anything publicly traded, the price of a share is principally derived from belief. Much of this belief comes from a person projecting where the price will be in the future. With Tesla, many people and institutions projected that that price would increase in the future. Now many of them do not.

Belief in the direction of the price can come from examining the financial fundamentals of a company and the perceived value that it may increasingly generate ("fundamental analysis'). Or it can be speculative, where people believe other people will buy (or sell) more based on observed buying/selling activity ("technical analysis").

With Tesla, many investors were using their own version of technical analysis that far surpassed the valuation that a reasonable fundamental analysis would have derived and even derive today. There was and is a mania, much like there has been and there is for many forms of cryptocurrency.

The recently declining price is likely due to a collective perception that Tesla has been overpriced and, due to recent factors, that the fundamentals that justify the pricing for a share will diverge even further from its recent pricing. From a fundamental level, Tesla was unlikely to justify its recent pricing. An irony is that the earlier mania was so intense even today, after such a pronounced plunge from the start of the year, it likely remains seriously overvalued.