Tesla is on the verge of entering bear market territory following a prolonged decline.

The stock recovered slightly to close 1.9 percent lower at $1,013.39, representing a nearly 18 percent drop from its November 4 high.

Tesla Inc. shares are approaching bear-market territory after plummeting over the past week as CEO Elon Musk sold a portion of his stake in the electric vehicle maker and hinted that he may sell more.

The stock fell as much as 5.3 percent in New York on Monday, falling more than 20 percent from its record high of $1,229.91 set on Nov. 4. The stock then recovered slightly, closing down 1.9 percent at $1,013.39, representing a nearly 18 percent drop from the high. When a stock falls 20% on a closing basis, it enters a bear market.

The drop was precipitated by Musk's Twitter poll, which asked his followers whether he should sell some of his company's stock, followed by news of him unloading stock worth about $7 billion.

The blockbuster trading debut of Amazon.com Inc. and Ford Motor Co.-backed electric-truck maker Rivian Automotive Inc. last week, which some said could become a legitimate option for institutional investors who previously only had Tesla to play the EV space, may have added some additional pressure to shares. Rivian's stock rose another 15% on Monday, bringing the company's total gain since its IPO to 91 percent.