Retail investors dump Tesla, snap up chip, Bitcoin ETFs
An increasing number of Korean retail investors have dumped Tesla, a U.S. automotive and clean energy firm, rattled by its stagnant first-quarter sales both in China and Europe and compounded further by production delays in Germany, data showed Monday.
They instead increased holdings of the U.S. semiconductor manufacturers, software firms and Bitcoin and IT exchange-traded funds (ETFs).
According to data from Korea Securities Depository, the U.S. tech titan Nvidia topped the list of U.S. stocks purchased by Korean investors. They net-purchased $380 million ($509 billion) worth of shares from March 1 to 21.
The second-most-popular equity product for Korean investors was the Direxion Daily Semiconductor Bull and Bear 3X Shares, an ETF seeking three times the performance of the New York Stock Exchange Semiconductor Index. The net-purchase price came to $240 million.
The third in line was shares of MicroStrategy, a U.S. digital service provider with the world’s largest Bitcoin holdings. Net purchases of $170 million were made in the period. The fourth was 2X Bitcoin Strategy, an ETF designed to track the performance of the digital currency.
Ranking the fifth and sixth were ETFs related to Nvidia and TSMC, a Taiwan-based global semiconductor foundry.
Tesla sank to seventh place. The net-purchased shares came to $93 million, down from a range of between $327 million and $338 million in the first two months.
Tesla shares slumped 14.4 percent over the past month to come to $172.82. The figure is a further fall from $248.48 registered as of the end of last year.
According to market insiders, about one in nine overseas brokerages recommended an underweight or neutral position for Tesla shares.
Analysts say the Nvidia-propelled artificial intelligence (AI) share rally will continue for the time being.
Nvidia’s month-to-date increase stood at 15.6 percent, pushing up its stock price to $914.35. The near$1,000 figure is an 84.6 percent yearto-date spike from the end of last year when it came to $495.22.
Sharp drops in the Nvidia prices were almost always interspersed with steady inflow of investment funds seeking to augment the holding total, in a sustained upward trajectory over the past few months.
Korea Investment & Securities researcher Chae Min-sook said attempts by AMD, an American semiconductor firm and a major competitor of Nvidia, to replace Nvidia’s graphics processing unit (GPU) supply will not be able to gain traction in the near future.
“AMD’s moves will not pose enough of a threat to overthrow the reign of Nvidia for a significant period of time,” Chae said.