Elon Musk may keep selling Tesla, with or without Twitter
Investors expect Elon Musk to sell more shares of his electric carmaker Tesla Inc. by the end of 2022, according to the latest MLIV Pulse survey.
About 75% of 1,562 respondents, who include portfolio managers and retail traders, say Musk won’t end up owning Twitter Inc. -- a deal that led him to offload about $8.5 billion of Tesla shares in April. A third of respondents predict he will settle with the social- media company for more than $1 billion rather than seeing through his $ 44 billion takeover at $54.20 per share, while 27% think a judge will order him to pay the $1 billion breakup fee.
Musk will likely sell shares regardless of what happens with the Twitter deal,” said Mike Loukas, chief executive officer of TrueMark Investments, echoing the sentiment of 68% of those surveyed. “But if investors read too much into it,
they’re likely not seeing the forest through the trees.”
That could signal further pain for Tesla stock, which is down about 16% this year, more than the 13.3% decline in the S& P 500. The Austin- based company has been roiled by supply-chain shortages, Covidrelated lockdowns in China, and confusion surrounding Musk’s pursuit of Twitter.
Musk, 51, is the world’s richest person, with a $260 billion fortune derived largely from his stake in Tesla. But he’s been shedding shares as of late: He conducted a Twitter poll in November about selling 10% of his position, then proceeded to sell more than 15 million shares over the next couple of months.
Musk offloaded about 9.4 million Tesla shares in April after his deal to buy Twitter, amounting to $25 billion worth of stock sold in the span of six months.
He’s now attempting to back out of the agreement, which will be the subject of a fast-tracked October trial in Delaware Chancery Court.
Whatever the outcome, investors expect that Tesla shareholders will welcome an end to the matter.
“If his stock sale is accompanied by a definitive agreement that puts the Twitter mess behind him, Tesla could rally,” said Steve Sosnick, chief strategist at Interactive Brokers. “A definitive end to Twitter would remove a distraction and theoretically allow Musk to focus more on Tesla.”