NEW YORK, Nov 13 — Shares of Tesla Inc closed lower yesterday, snapping an 11-week winning streak after filings showed CEO Elon Musk sold another block of company stock worth about US$700 million (RM2.9 billion), taking advantage of a meteoric rally that vaulted the electric-car maker’s value to over US$1 trillion.
The second round of hefty stock sales this week came just days after the world’s richest person and Tesla’s top shareholder tweeted that he would sell 10 per cent of his shares if users of the social media platform approved the move.
The electric-car maker’s stock closed down 2.8 per cent at US$1,033.42 yesterday. The shares are up more than 46 per cent this year following a sharp rally in October.
Musk’s trust sold 587,638 and 52,099 shares on Thursday in multiple transactions totaling about US$687 million, according to two separate filings yesterday.
Earlier this week, Musk disclosed he had offloaded some US$5.1 billion in Tesla stock. He has now sold about 3 per cent of his shares, according to Reuters calculations.
The stock sales, which marked the first time that Musk cashed out on a stake of that size since the company was founded in 2003, were massive by capital market standards, eclipsing the initial public offerings of most companies.
By getting Twitter users to green-light the move, he has blunted potential criticism of cashing out at a time when Tesla’s valuation has become frothy and shares are at record highs.
Still most valuable us automaker
Tesla shares fell 15.4 per cent this week and lost some US$187 billion in market value, more than the combined market capitalizations of Ford Motor Co and General Motors Co
Despite the week’s losses, Tesla is still the most valuable US automaker. Recent strong gains in the stock have underscored demand for shares of electric vehicle (EV) makers.
After the blockbuster market debut of Rivian Automotive Inc on Wednesday, the two most valuable US automakers are EV companies.
In a veiled jab at the Irvine, California-based rival, Musk tweeted on Thursday: “There have been hundreds of automotive startups, both electric & combustion, but Tesla is (the) only American carmaker to reach high volume production & positive cash flow in past 100 years.”
More sales?
Musk had previously said he would have to exercise a large number of stock options in the next three months, which would create a big tax bill. Selling some of his stock could free up funds to pay the taxes.
Prior to the sale, Musk owned a stake of about 23 per cent in Tesla, including stock options. He now needs to offload about 12 million more shares to fulfill his pledge to sell 10 per cent of his holdings.
“We expect the share sales will continue, as Musk holds millions of options worth billions of dollars that would otherwise expire worthless, and he has also prearranged share sales under 10b5-1 plans,” said Jason Benowitz, senior portfolio manager at the Roosevelt Investment Group LLC in New York. — Reuters
Tesla shares snap 11-week winning streak after Musk sells more stock
Source: Justice For Filipino
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