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SolarCity Corp (NASDAQ:SCTY) Crushed On Elon Musk Blues

Elon Musk SolarCity Corp (NASDAQ:SCTY)

SolarCity Corp (NASDAQ:SCTY)was one of the firms most affected by today’s market chaos as troubles in Greece spread across Wall Street on Monday. The firm, which counts Elon Musk among its leaders, has no direct reason for its loss of value, but a high valuation and a link to the failure of another Elon Musk project this weekend might be pushing shares lower.

Elon Musk SolarCity Corp (NASDAQ:SCTY)

On Sunday Elon Musk’s SpaceX had its first public failure literally explode on screens across the globe. In the middle of a live stream of a launch to send supplies to the ISS, the firm’s Falcon 9 rocket exploded. Saturday also market Mr. Musk’s birthday. Though he has never been known to let failure get the best of him, the market may be thinking twice about some of his other ideas.

SolarCity Corp sinks

Shares in SolarCity Corp were down by 4.6% to 53.29 at time of writing. First Solar, Inc. (NASDAQ:FSLR), another highly valued solar firm was also down on today’s market, though by a little over 3.5%, not quite the same depth that SolarCity plunged to.

Energy stocks as a whole had lost about 1.5% of their value at time of writing while the wider market, measure by the S&P 500 (INDEXSP:.INX) was down by 1.2$ at time of writing. SolarCity’s stock price has a huge amount of growth priced in, and when the market shrinks stocks that rely largely on future growth to justify their value tend to do worse.

SolarCity still hasn’t managed to make a profit, and the firm is valued at more than $5 billion. When the market turns, as it is clearly doing today, those with hopeful long shot cash behind firms that rely on market belief for their success tend to flee toward safety.

Elon Musk faces SpaceX failure

SolarCity chairman Elon Musk also heads up SpaceX, the private space firm that managed to break an old monopoly on state spaceflight in the US last year. On Saturday a cargo of supplies for the ISS exploded in the sky above Florida after the firm’s rocket malfunctioned. The cause of the mistaken blast is still unknown, but the SpaceX team is working on finding the issue.

Early this morning Mr. Musk tweeted “Cause still unknown after several thousand engineering-hours of review. Now parsing data with a hex editor to recover final milliseconds.” On Sunday he said that the problem was in caused by “an overpressure event in the upper stage liquid oxygen tank. Data suggests counterintuitive cause.”

There is no major business link between SolarCity and SpaceX and the two firms operate in very different sectors. One thing they do have in common, however, is that those with cash, or emotional investment, behind them tend to believe in the vision of Elon Musk.

Those with shares in Tesla Motors Inc (NASDAQ:TSLA) and SoarCity Corp believe deeply in the future that he has outlined, and they think they can make money by getting there.

Sunday’s blast may have shaken that faith a little more than it should have and combined with a very bad market on Monday, SolarCity shares are falling hard.

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