The CEO of the world's largest electric car company has sold about $8.4 billion worth of Tesla shares over the past week. According to documents provided to regulators, the series of transactions took place between August 5 and 9, 2022, shortly after the August 4 shareholder meeting in Austin.
As recently as April of this year, the Tesla and SpaceX CEO wrote that he "has no plans for another stock sale," after divesting a stake worth $8.5 billion to buy Twitter. This is not the first time Elon Musk has confused his public. The businessman seems to frequently abuse his influence, throwing around bold statements and increasing the expectations of his followers.
When asked recently if he had stopped selling Tesla, for the time being, he replied "yes. In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock."
However, it's hard not to get the impression that the CEO is simply taking advantage of the recent rebound in the share price. It is possible that his goal is not just to finance the deal, but to try to protect his private fortune. Such a major sale of an important shareholder had a significant impact on both Twitter and Tesla's stock price.
Twitter rose at the opening by almost 4%, thanks to the increasing likelihood of the deal being finalized, which may have been due to Musk's recent tweet. Most of the news coming out of the courtroom also reinforces analysts' belief that the Tesla CEO will be forced to buy the company. The platform's stock price has gained more than 35% over the past month, with a price target.
Tesla, influenced by the news of the sale of a large stake by the most important person in the company, has lost around 7% over the past four sessions. The company itself gained more than 44% from its July 16 bottom to its August 4 peak at the shareholder meeting.
Tesla, like many technology companies, has gained significantly from the recent bear market rally. This growth can also be attributed to Tesla's results, in which it beat expectations for earnings per share (EPS) by more than 26%.
However, the macroeconomic analysis is rather pessimistic for the electromobility market in the short and midterm. During recessions, companies are usually unable to achieve high expected growth rates by falling consumer demand. More often than not, revenues fall, profits decline, and as a result, stock prices fall as well.
Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
