Tesla Stock Price Slides After Elon Musk Sells $5 Billion Worth of Shares

Tesla stock fell slightly on Thursday after filings that Chief Executive Elon Musk sold shares worth nearly $5 billion (about Rs 37,223 crore) this week following his much-talked-about Twitter poll.

The electric-car maker’s stock ended 0.4 per cent lower at $1,063.51 (approximately Rs 79,100).

musk The share sale was his first since 2016 and comes after him. weekend polling About to Offload 10 Percent of Twitter Users Tesla stake, which includes his estimated assets of $281 billion (approximately Rs 20,91,964 crore).

“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 approximately $4 billion (about Rs 29,779 crore), while he paid $1.1 billion to cover tax obligations after exercising the acquisition options. (approximately Rs 8,189 crore) sold another 934,000 shares. About 2.2 million shares.

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

Before the sale, Musk owned a 23 percent stake in Tesla, including stock options. He also owns other companies which include SpaceX,

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

“Elon Musk doesn’t take a salary, he’s paid for a large part of the stock. At some point you 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.”

With about 800,000 options, or about 12 percent of Tesla’s open contracts, scheduled to expire at the close of trading on Friday, some analysts have pointed to the potential for additional near-term volatility as investors and options dealers alike. Make adjustments to account for expiring positions. ,

Tesla did not respond to a request for comment.

EV Frenzy

Tesla has lost $157 billion (about Rs 11,68,846 crore) in share market value this week, which is more than the total market capitalization. Wade And General Motors, At the same time, the demand for shares of electric vehicle manufacturers has become hot.

shares of rivian The day after a stellar market debut jumped 22 per cent, sending the company’s valuation to over $100 billion (about Rs 7,44,581 crore). lucid increased by 10 percent.

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, 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.

“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 filed to sell shares worth nearly $1 billion (about Rs 7,445 crore) as Tesla’s market value is $1 trillion (about Rs 74,45,165 crore). ) is exceeded. Months according to filings and market data.

Tesla’s share 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 have helped it rise 51 percent this year and 1,300 percent from 2020 lows. have helped.

© Thomson Reuters 2021