Tesla dips after Musk sheds $5 billion in shares

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(Businesshala) – Tesla stock fell slightly on Thursday after filings showed Chief Executive Elon Musk sold nearly $5 billion in his shares this week following his much-discussed Twitter poll.

FILE PHOTO: A Tesla logo is seen at the Tesla Shanghai Gigafactory in Shanghai, China January 7, 2019. REUTERS/Aly Song

The electric-carmaker’s stock ended the session down 0.4% at $1,063.51 after falling earlier in the week.

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Musk’s share sale was his first since 2016 and comes after his weekend poll of Twitter users offloaded 10% of his Tesla stake, which comprises the majority of his estimated $281 billion.

“I don’t think investors are reading the news negatively,” said Oliver Purse, senior vice president and advisor at Wealthspire Advisors in New York. “If you believe in Tesla’s story, it shouldn’t affect you or change your mind.”

Tesla stock is in the portfolio used by Wealthspire, Purse said.

The filing showed that Musk’s trust sold approximately 3.6 million shares of Tesla, valued at about $4 billion, to cover tax obligations after he exercised options to acquire approximately 2.2 million shares, for $1.1 billion. Sold another 934,000 shares.

The sale is equivalent to about 3% of Musk’s total holdings. The options-related portion of the sale was placed long before their Twitter poll in September.

Prior to the sale, Musk owned a 23% stake in Tesla, including stock options. He also owns other companies including SpaceX.

Musk’s move to sell his Tesla shares follows a proposal by US Senate Democrats to tax billionaires’ stock holdings to help finance President Joe Biden’s social spending plan.

“Elon Musk doesn’t take a salary, he’s paid in large chunks of stock. At some point you’re going to have to reduce some of that concentration,” said Art Hogan, chief market strategist at National Securities in New York.

“It’s not novel. It just gets more attention because it’s such a high market-cap type, attention-grabbing company.”

Tesla did not respond to a request for comment.

EV Frenzy

Tesla lost $157 billion in stock market value this week, more than the combined market capitalization of Ford Motor Co and General Motors Co. At the same time, the demand for shares of electric vehicle manufacturers has heated up.

Shares of Rivian Automotive Inc. jumped 22% a day after a stellar market debut that sent the company’s valuation exceeding $100 billion. Lucid Group rose 10%.

Underscoring retail investors’ thirst for EV stocks, Rivian, Tesla and Lucid made up three of the four most-traded stocks on Fidelity’s brokerage website on Thursday, with buy orders exceeding sell orders.

Wall Street’s biggest institutional investors, including T. Rowe Price and BlackRock Inc., bet on Rivian to become the next big player in the Tesla-dominated sector, amid mounting pressure on automakers in China and Europe to eliminate vehicle emissions. are putting.

“Rivian’s valuation makes it a valid option for institutional investors, who previously only had Tesla in the electric vehicle space to play,” wrote Nicolas Kolas, co-founder of Datatrack Research, in a recent note.

Four former and current Tesla board members, including Musk’s brother, Kimbal Musk, have sold nearly $1 billion worth of shares since Tesla’s market value exceeded $1 trillion at the end of last month, according to filings and market data. filed for.

Tesla’s stock price has posted staggering gains in recent years and is emblematic of the upbeat mood in US markets and the optimism of small-time traders, who helped it rise 51% this year and 1,300% from 2020 lows. is of.

Reporting by Tom Westbrook in Sydney and Medha Singh in Bengaluru; Additional reporting by Noel Randwich in Oakland, Calif.; Tanvi Mehta, Bansari Mayur Kamdar, Anisha Sarkar and Devik Jain in Bengaluru, and Caroline Valetkevich and Ira Iosbashvili in New York; Editing by Anil D’Silva, Nick Ziminsky and Matthew Lewis

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