Musk’s potential Tesla stake sale follows share surge

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NEW YORK, Nov 9 (Businesshala) – Should Elon Musk decide to offload some of his stake in Tesla Inc. (TSLA.O), he will take advantage of a massive rally that saw the electric-automaker become one of the world’s most valuable has made it. companies.

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The Tesla chief asked his Twitter followers on Saturday whether he should sell 10% of his Tesla stake. About 58% said they would support such a sell-off, causing the stock to drop 4.9% when trading resumes on Monday.

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Musk polled his Twitter followers after Tesla shares jumped in recent weeks, a strong, if volatile, addition to the stock’s S&P 500 index (.SPX) late last year.

Trading at Tesla averaged $19 billion a day over the past three months, more than any other US company, according to Refinitiv data.

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Let’s have a look at the shares of Tesla:

After falling in the first half of 2021, Tesla shares have risen in recent weeks. Since October 20, the stock has gained 34%, a 3.6% increase in the S&P 500 at the time, a move that boosted the electric-car maker’s market value by more than $1 trillion.

With those recent gains, Tesla shares are now up 67% since the stock joined the S&P 500 in late December, a 27% gain for the benchmark index at the time.

Businesshala Graphics

Tesla accounts for about 2.5% of the S&P 500’s $4 trillion market capitalization. This compares to 1.8% in December 2020 when Tesla is included in the index.

S&P 500. in Tesla

Tesla’s valuation has plummeted in recent months, as analysts raised their earnings estimates. Analysts averaged Tesla’s 2022 earnings per share at $7.92, up from an average estimate of $5.50 per share in February.

However, Tesla’s PE valuation has skyrocketed, with the stock now trading at 150 times future earnings, compared to 21 times for the S&P 500.

Tesla’s Forward P/E

Small bets have declined against Tesla this year as the stock’s rally forced some investors to cover their positions.

Analytics firm S3 Partners said on Monday that Tesla shares stood at 29.5 million, down from 60.6 million in early January. Short positions in Tesla as a percentage of the company’s float have declined from about 8% at the beginning of the year to 3.6%.

Still, Tesla’s short interest, a measure of the stock price and number of shares, amounted to about $36.1 billion, more than any other stock, according to S3.

Businesshala Graphics

Shares of Tesla and other car companies have seen a big jump this year as the auto sector goes through turmoil related to the global supply crisis and other effects of the coronavirus pandemic. Tesla’s stock has risen or fallen 2% in a single session so far in 2021, 99 times, compared to 79 times for Ford Motor (FN) and just five times for the S&P 500.

Businesshala Graphics
Reporting by Noel Randevich and Lewis Kraskoff; Additional reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili and Muralikumar Anantharaman

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