Tesla's market value falls below $1 trillion after Musk's tweets
Reuters | California
The Daily Tribune – www.newsofbahrain.com
Tesla Inc's (TSLA.O) stock extended its recent selloff on Monday as investors reacted to CEO Elon Musk's recent share sales of a combined $6.9 billion, as well as to his most recent tweets.
Tesla's stock ended nearly 2% lower at $1,013.39, leaving the company's market capitalization down about $207 billion since before Musk began selling shares last week.
The latest stock decline follows a Sunday dispute on Twitter between Musk, the world's richest person, and Bernie Sanders after the U.S. senator demanded that the wealthy pay their "fair share" of taxes. read more
During Monday's session, Tesla traded as low as $978.60, pushing its stock market value below the $1 trillion mark on an intraday basis for the second time in four sessions.
Tesla first hit the $1 trillion mark late last month.
"Tesla shares have been sinking post the sale based on a Twitter poll last week. And Musk's Sunday tweet deriding a senior politician may add pressure on the stock in the coming weeks," said Kunal Sawhney, CEO of equity research firm Kalkine Group.
Musk sold 6.36 million Tesla shares last week after floating the idea in a Twitter poll. He would need to offload about 10 million more to fulfil his pledge to sell 10% of his holdings in the electric-vehicle maker.
Fueled by thirst on Wall Street for electric vehicle makers, Tesla's stock has surged more than 140% in the past 12 months. The recent selloff has the stock at its lowest level since late October.
Also on Monday, Rivian Automotive (RIVN.O) jumped nearly 15%, with the Amazon.com-backed (AMZN.O) EV maker now up about 90% since its initial public offering last week.
Reflecting retail investors' enthusiasm, Tesla and Rivian were the most-traded stocks on Fidelity's online brokerage, with more than two buy orders for every sell order.
CHIP SUPPLY CONSTRAINTS
Musk on Saturday asked a Twitter user not to "read too much into" PepsiCo (PEP.O) CEO Ramon Laguarta's comments about expecting its first delivery of Tesla Semi trucks in the fourth quarter.
"As mentioned publicly, Tesla is constrained by chip supply short-term & cell supply long-term," Musk tweeted. "Not possible to produce additional vehicles in volume until both constraints are addressed."
Tesla has weathered the pandemic and the global supply-chain crisis better than rivals, posting record revenue for the fifth consecutive quarter.
Meanwhile, investor Michael Burry of "The Big Short" fame took aim at Musk again, tweeting, "@elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn't need cash. He just wants to sell $TSLA."