Tesla is Falling After Musk Spent $5 billion
Shares of Tesla fell on Thursday after CEO Elon Musk sold stocks worth about $5 billion. Stakes of the electric car maker at $1063.51 per share are down 0.4 percent.
Selling Musk shares was the first step since 2016. This came after a poll of Twitter users that saw Tesla buy a 10 percent stake, about $281 billion. According to Oliver Pursche, senior vice president at Wealthspire Advisors, it is doubtful that investors were reading the news negatively. This should not affect the general opinion. Tesla shares are used in portfolios by Wealthspire.
According to the documents, Musk sold nearly 3.6 million shares of Tesla for about $4 billion. In addition, to cover its tax liabilities, it sold another 934,000 shares for $1.1 billion after using nearly 2.2 million shares to buy options. The sale is about 3 percent of Musk’s total assets.
Market After Tesla Stocks
It is worth noting that the part related to sales options was launched in September, before the Twitter poll. Before the sale, Musk owned 23 percent of Tesla, including stock options. In addition, Elon owns other companies, including SpaceX. Muskie’s move to sell Tesla shares came after U.S. Senate Democrats offered to tax the billionaires’ shares to fund President Joe Biden’s social spending plan.
According to Art Hogan, chief market strategist at National Securities, Elon Musk does not receive a salary. He is paid a large portion of the shares. At some point in time, you need to reduce this concentration portion. This action is not new. It gets more attention because it is a relatively high type of market capitalization. With nearly 800,000 options or 12 percent of Tesla open contracts expire at the end of trading on Friday. Some analysts have pointed to the potential for additional near-term volatility as options dealers and investors adjust for maturity positions.
Tesla lost $157 billion worth of stock this week. This is more than just a joint market capitalization of General Motors Co. and Ford Motor Co. At the same time, demand for shares of electric car manufacturers has increased.
Shares of Rivian Automotive Inc. rose 22 percent after the star market debuted, bringing the company to more than $100 billion. Lucid Group grew by 10 percent. This makes clear the desire of retail investors towards electric car stocks. On Thursday, Tesla, Rivian, and Lucid traded three of the four most significant trading shares on Fidelity’s brokerage website, with buying orders exceeding selling orders.
Tesla Isn’t Alone Anymore
Wall Street’s largest institutional investors, including BlackRock Inc and T. Rowe Price, are betting on Rivian. They believe that this company will be the next big player in the sector where Tesla dominates. The aim is to eliminate car emissions in the face of growing pressure on automakers in Europe and China.
Nicholas Colas, the co-founder of DataTrek Research, said the Rivian is a legitimate option for institutional investors who previously had only Tesla as a player in the electric car space. Four former and current members of Tesla have filed a lawsuit to sell shares worth nearly $1 billion. Tesla’s market value has exceeded $1 trillion since the end of last month. The stock price of the company has experienced a staggering profit in recent years. It brought an uplifting mood to U.S. markets and optimism, which brought the corporation great success.
The decision of the richest man in the world to sell shares was previously planned. However, it is interesting in the long run what the result will be. We are left to wait for Elon’s next risky move. We will soon know what the latest decision related to Tesla will bring to the world and directly to Musk.