Summary
- Sale takes Musk’s total selling to nearly $40 bln
- Tesla stock marks lowest close in two years
- Investors annoyed at Musk’s selling and focus on Twitter
Tesla (TLSA.O) chief executive Elon Musk revealed another $3.6 billion in Tesla stock sales on Wednesday, bringing his total to around $40 billion in 2022 and annoying investors as the company’s shares plunge to two-year lows.
A U.S securities filing revealed he sold 22 million shares in the world’s most valuable carmaker over three days from Monday to Wednesday. The sale is the second large chunk of stock he has cashed out since his $44 billion acquisition of Twitter in October, despite his repeated promise in April that he was done unloading Tesla shares.
It isn’t clear if the sales are associated with the Twitter acquisition, but they are frustrating investors who are troubled by a perception he is shifting his focus and resources to Twitter ahead of Tesla.
“It doesn’t put a lot of confidence in the business, or speak volumes for where his attention is at,” said Tony Sycamore, an analyst at brokerage IG Markets, where Tesla is a popular stock among small investors.
“It’s not a good situation. I’ve spoken to a lot of investors who have Tesla shares and they’re absolutely furious at Elon.”
There was no instant response to a Reuters request for comment from Musk and Tesla emailed outside business hours. Musk’s 13.4% stake in Tesla has reduced from about 17% a year earlier, according to Refinitiv data.
Tesla stock, which climbed about 1% in early trading on Thursday, has lost half its value this year, underachieving both automakers (.SPLRCAUTM) and the broader tech-heavy Nasdaq (.IXIC), which is down about 30% in 2022.
The value of Musk’s total selling over the past year amounts to almost $40 billion.
“It will start to be tiring for investors,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore.
The most recent share sale takes place a month after Musk unloaded shares worth $4 billion in the days after he finalized the Twitter deal.
Tesla investor Ross Gerber, a firm supporter of Musk, said on Twitter that Tesla should announce a buyback “to take advantage to (sic) the low share price Elon has created.”
The Spread Is Thin
Musk’s fortune, mostly tied up in Tesla shares, has dropped with prices this year and he was briefly stripped of his title as the world’s richest person last week – according to Forbes – when he was outranked by Louis Vuitton boss Bernard Arnault.
Meanwhile, Twitter has seen advertisers pull out amid concerns about Musk’s approach to policing tweets, weighing on revenues and its ability to pay interest on the $13 billion debt that Musk took on for the deal.
Buy Crypto NowHis controversial tweets also threaten to hurt the brand and sales of Tesla cars, investors say.
“Investors are concerned about demand, pricing, auto-GMs (gross margins) and Twitter distraction/overhang/impact on Tesla brand,” said RBC Capital Markets, reducing its price target by $100 to $225.
Tesla is also facing macroeconomic headwinds that weigh down on demand for its expensive cars. The company is giving discounts in China and the United States, two of its largest markets, to buoy up demand.
Tesla will be great long-term, but doesn’t control macroeconomic tides
— Elon Musk (@elonmusk) December 13, 2022
Musk said on Tuesday that “Tesla will be great long-term, but doesn’t control macroeconomic tides.”
