The electric-car maker’s stock ended the session down 0.4 per cent at $1,063.51 after tumbling earlier in the week.
Mr. Musk’s share sale was his first since 2016 and comes after his weekend poll of Twitter users about offloading 10 per cent of his Tesla stake, which comprises most of his estimated US$281-billion fortune.
“I don’t think investors are reading in to the news negatively,” said Oliver Pursche, senior vice-president and adviser at Wealthspire Advisors in New York. “If you believe in the Tesla story, this should not impact you or change your mind.”
Tesla’s stock is in portfolios managed by Wealthspire, Mr. Pursche said.
Filings showed Mr. Musk’s trust sold nearly 3.6 million shares of Tesla, worth around US$4-billion, while he also sold another 934,000 shares for US$1.1-billion to cover tax obligations after exercising options to acquire nearly 2.2 million shares.
The sale equates to about 3 per cent of his total holdings. The options-related part of the sale was put in place in September, well before his Twitter poll.
Before the sale, Mr. Musk owned a 23-per-cent stake in Tesla, including stock options. He also owns other companies including SpaceX. His move to sell shares comes as U.S. Senate Democrats propose taxing the stock holdings of billionaires to help finance President Joe Biden’s social-spending plan.
“Elon Musk doesn’t take a salary, he’s paid in big chunks of stock. At some point in time you have to take some of that concentration down,” said Art Hogan, chief market strategist at National Securities in New York. “This is not novel. It just gets more attention because it’s such a high market-cap type, attention-grabbing kind of company.”
Tesla did not respond to a request for comment.
Tesla this week has lost US$157-billion in stock market value, more than the combined market capitalizations of Ford Motor Co. and General Motors Co. At the same time, demand for shares of electric vehicle makers has heated up.
Shares of Rivian Automotive Inc. jumped 22 per cent one day after a stellar market debut that drove the company’s valuation past US$100-billion. Lucid Group surged 10 per cent.
Underscoring retail investors’ thirst for EV stocks, Rivian, Tesla and Lucid made up three of the four most-traded stocks on Fidelity’s brokerage website on Thursday, with buy orders outnumbering sell orders.
Wall Street’s biggest institutional investors, including T. Rowe Price and BlackRock Inc., are betting on Rivian to be the next big player in a sector dominated by Tesla, amid mounting pressure on automakers in China and Europe to eliminate vehicle emissions.
“Rivian’s valuation makes it a legitimate option for institutional investors who have previously only had Tesla to play the electric-vehicle space,” wrote Nicholas Colas, co-founder of DataTrek Research, in a recent note.
Four former and current Tesla board members, including Mr. Musk’s brother, Kimbal Musk, have filed to sell nearly US$1-billion worth of shares since Tesla’s market value surpassed US$1-trillion late last month, according to filings and market data.
Tesla’s share price has made staggering gains over recent years and has epitomized the ebullient mood in U.S. markets and the optimism of small-time traders who have helped drive it up 51 per cent this year and 1,300 per cent from 2020 lows.
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