🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Musk cashes out another $3.6 billion in Tesla stock

Published 12/14/2022, 09:31 PM
Updated 12/15/2022, 06:41 PM
© Reuters. FILE PHOTO: Tesla Chief Executive Elon Musk speaks during the live-streamed unveiling of the Tesla Semi electric truck, in Nevada, U.S. December 1, 2022, in this still image taken from video. Tesla/Handout via REUTERS
TSLA
-

By Maria Ponnezhath and Hyunjoo Jin

(Reuters) -Tesla boss Elon Musk disclosed another $3.6 billion in stock sales on Wednesday, taking his total near $40 billion this year and frustrating investors as the company's shares wallow at two-year lows.

A U.S securities filing showed he unloaded 22 million shares in the world's most valuable carmaker over three days from Monday to Wednesday.

The sale is the second big chunk of stock he has cashed out since his $44 billion purchase of Twitter in October, despite his repeated assurance in April that he was done selling Tesla (NASDAQ:TSLA) shares.

It isn't clear if the sales are related to the Twitter acquisition, but they are annoying investors who are upset by a perception he is diverting 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-time 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 immediate response to a Reuters request for comment from Tesla and from Musk emailed outside business hours. Musk's 13.4% stake in Tesla is down from about 17% a year ago, according to Refinitiv data.

Tesla stock, which rose about 1% in early trading on Thursday, has halved this year, underperforming both automakers and the broader tech-heavy Nasdaq, which is down about 30% this year.

The value of Musk's total selling over the past year comes to nearly $40 billion.

"It will start to be tiring for investors," said Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore.

The latest share sale comes a month after Musk sold shares worth $4 billion in the days after he closed the Twitter deal.

Tesla investor Ross Gerber, a strong supporter of Musk, said on Twitter that Tesla should announce a buy back "to take advantage to (sic) the low share price Elon has created."

SPREAD THIN

Musk's fortune, mostly tied up in Tesla shares, has fallen with prices this year and he briefly lost his title as the world's richest person last week - according to Forbes - when he was overtaken by Louis Vuitton boss Bernard Arnault.

Meanwhile, Twitter has seen advertisers flee amid worries about Musk's approach to policing tweets, hitting revenues and its ability to pay interest on the $13 billion debt that Musk took on for the deal.

His controversial tweets also threaten to damage 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, slashing its price target by $100 to $225.

© Reuters. FILE PHOTO: Tesla Chief Executive Elon Musk speaks during the live-streamed unveiling of the Tesla Semi electric truck, in Nevada, U.S. December 1, 2022, in this still image taken from video. Tesla/Handout via REUTERS

Tesla is also facing macroeconomic headwinds that weigh on demand for its expensive cars. The company is offering discounts in the United States and China, two of its biggest markets, to boost demand.

Musk said on Tuesday that "Tesla will be great long-term, but doesn't control macroeconomic tides."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.