Tesla stock falls after disclosure of Elon Musk’s  billion sale

Tesla stock falls after disclosure of Elon Musk’s $4 billion sale

Tesla (TSLA) shares fell on Wednesday after CEO Elon Musk announced Tuesday night that he had sold $4 billion worth of shares in the first two weeks of November.


Musk sold 19.5 million shares for $3.95 billion on Nov. 4, 7 and 8, according to SEC filings late Tuesday. The decision to sell some of his Tesla shares comes as Musk completes his $44 billion purchase of Twitter.

Tesla stock

Tesla shares fell 1.7% during trading on Wednesday. On Tuesday, shares fell 2.9% to 191.30 but remained well below the session low of 186.75 as the broader market gained momentum. According to MarketSmith analysis, TLSA shares are down more than 40% year-on-year and are nearing the May 2021 lows.

Tesla stock has sold off heavily since Musk’s Twitter takeover. Musk’s recent stock sales likely helped fuel the recent drop in Tesla stock. Increased subsidies from China and concerns about Elon Musk’s Twitter dominance could also impact TSLA stock.

Battle of the Titans: Tesla vs. BYD

Tesla is also recalling more than 40,000 2017-2021 Model S and X vehicles over possible power steering assistance, Reuters reported Tuesday. Tesla is handling the recall via an over-the-air update.

Can an Insurance Subsidy Boost Tesla Stock?

On Tuesday, Tesla brought back an insurance subsidy for vehicles purchased in China by the end of the year, after a price cut in late October as the EV giant tried to boost demand amid rising production.

The EV giant announced the November insurance subsidy is worth 8,000 yuan ($1,100) for people who buy its vehicles in inventory as the company tries to increase orders. In December, the subsidy will be reduced to 4,000 yuan (US$550). Tesla shares fell on Tuesday.

Tesla already rolled out a 7,000-yuan insurance subsidy for all vehicles in late September, as waiting times for its electric vehicles have dropped to essentially zero. Starting October 1, Tesla will offer 0% down payments and preferential rates on loans. These incentives served as de facto price reductions.

Tesla slashed actual prices for Model 3 and Model Y by up to 9% in China on Oct. 24. Following those October price cuts, Tesla briefly scrapped the insurance subsidy it introduced in September before reinstating it on Tuesday.

Tesla Stock: China Deliveries

Tesla delivered 71,704 vehicles from its newly modernized Shanghai plant in October, according to the China Passenger Car Association. That was up 32% year over year, but down nearly 14% from September’s record 83,135. Tesla exported a record 54,504 vehicles from the Shanghai plant in October and sold 17,200 in China.

The global EV giant reported Q3 deliveries of 343,830 cars, up 42% year-on-year and above the Q1 record of 310,048. However, this was well below analysts’ estimates.

The company said it faced logistical challenges throughout the quarter and vehicles were on the move.

Tesla produces the Model S luxury sedan, Model X SUV, and Model 3 sedan and Model Y crossover. Other vehicles in the plants include the Semi and Cybertruck. Musk said the Cybertruck is on track for launch in mid-2023 and that the Tesla Semi will begin deliveries in late 2022.

Semi-finished product production begins

Musk tweeted in October that Tesla was beginning production of Tesla Semi trucks. deliveries to PepsiCo (PEP) should start on December 1st. Musk says the electric semis will have a range of 500 miles per charge.

Tesla production is ramping up, particularly in China, so demand will need to increase significantly in the fourth quarter and beyond to match supply. China’s EV subsidies will expire on December 31, while Germany will cut its subsidies on January 1. That should boost demand for Tesla and other EV makers, but could mean weaker demand in the new year.

Unofficial vehicle registration data from China for the first week of the month shows the US EV giant lagging behind its rival BYD (BYDDF) with a big lead for total vehicle sales. New vehicle insurance registrations in China between Oct. 31-Nov. 6 totaled 110,539, up 43% year-over-year but down 12% from the previous week, CnEVPost reported on Tuesday.

BYD, the world’s largest maker of electric vehicles and plug-in hybrids and China’s largest supplier of pure electric vehicles, topped the list with 37,168 insurance filings. Elon Musk’s Tesla came second with 11,195 registrations.

China EV startups no (NOK), Li car (LI) and XPeng (XPEV) far behind, but among the top 14 vehicle manufacturers.

Twitter distraction

Since Elon Musk took over Twitter on Oct. 28, he’s cut roughly half the social media site’s staff while frequently tweeting about his plans, politics and more. There are concerns that Musk is distracted by Tesla’s leadership, as well as concerns that he could tarnish his image, which could spill over into the Tesla brand. Tesla stock is down around 17% since Oct. 28.

Tesla stock has a 45 Composite Rating of 99. TSLA stock has a dismal Relative Strength rating of 16. The EPS rating for Tesla stock is 75.

Please follow Kit Norton on Twitter @KitNorton for more coverage.


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