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Tesla Stock Drops As CEO Musk Promises Sale Of 10% Stake In “Bizarre” Twitter Poll


Tesla (TSLA) stock sank on Monday as CEO Elon Musk appears likely to sell 10% of the stock he holds in the company. Over the weekend Musk conducted a Twitter poll asking whether he should sell 10% of his Tesla stock, promising to abide by the results.




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Musk says he conducted the poll in the context of the Biden administration’s proposal to levy a billionaire’s tax on unrealized gains, which ended up being taken out of the bill.

About 3.5 million followers voted for Musk to sell a 10% stake, worth about $21 billion. Wedbush analyst, who called the Twitter poll a “bizarre soap opera,” in a note to clients on Monday, said the sale is not entirely a surprise.

“Either way it was well known that Musk had a big tax bill coming due from his 23 million stock options awarded in 2012 that have vested and expire in August 2022, and he was going to sell some stock before year-end,” he wrote. 

Musk currently owns roughly 23% of Tesla, and Wall Street expected he would sell up to 6% of his stake, Ives said. But 10% “could surprise some investors,” he added. Still, Ives believes it’s a “digestible number.”

“We would rather Musk rip the Band-Aid off now and sell this portion of stock rather than it lingering over the next year and feeding into any nonfundamental bear thesis on the story,” Ives wrote.

China EV Sales 

The China Passenger Car Association reported that Tesla sold 54,391 made-in-China vehicles in October, including 40,666 for export. In September, Tesla sold 56,006 vehicles, including 3,853 exports. 

Tesla, which makes Model 3 and Model Y SUVs in China, typically exports the bulk of its China-made vehicles to Europe in the first couple of months of the quarter.

CPCA said passenger car sales in October in China totaled 1.74 million, down 14% from a year earlier.

Meanwhile, PepsiCo (PEP) CEO Ramon Laguarta told CNBC in an interview Monday that it’s expecting delivery of 15 Tesla Semi electric trucks by the end of the year. PepsiCo previously said it had ordered 100 Semis.

However, Musk has said production and delivery of its Semi depends largely on the availability of 4680 batteries, which are not yet widely available.

Tesla Stock

Shares gapped down 5% to around 1168 on the stock market today. Tesla stock had dropped as much as 7% in early trading. But it’s rallied to near the top of the day’s range to 1190.31, down 2.6% on the day.

Its relative strength line spiked up last week, as the stock soared, according to MarketSmith. Its RS Rating is 97, while its EPS Rating is 71.

Tesla, a Leaderboard stock, triggered the 8-week hold rule after rapidly reaching its profit goal from its latest entry.

Among U.S. carmakers vying for EV market share, General Motors (GM) rose 2.9% and Ford (F) leapt 5.6%. Recent IPO Lucid (LCID) gapped up 9%.

China-based rivals Nio (NIO) was up 4.7%, Xpeng (XPEV) rose 2% and Li Auto (LI) added 1%.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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