Tesla investors start the new year willing to escape the shadow of the previous year, 2022. Last year, nearly $670 billion of value was wiped out. Elon Musk, technological king and largest shareholder of Tesla.Inc is at the center of that in a genuine sense.
Though, 14 months ago, Musk started heavy selling of Tesla in November 2021. Recently, after Tesla missed delivery projections for the fourth quarter. Worries about weakening demand in China and conversely hopes that the worst is over.
However, this should encourage investors to carefully examine the volume and pattern of Musk’s sales.
Musk sold in four partitions in late 2021, April and August, and at the end of that year. Later, he cashed out some of his stocks right at the top but then kept selling as it fell dramatically through 2022.
Hence, that is the way Musk chased the price down, selling more and more even as it tanked.
During the last year, Musk disposed of almost 75 million shares through 1,279 open market transactions spread across 27 trading days. However, Gross proceeds were $39.4 billion. In contrast, if we look at the cumulative build-up of profits and shares sold, we can easily witness the diminishing return becoming apparent.
On the other hand, Musk disposed of 29% of the adjusted shares in the last two months. Later, Musk began his takeover bid for Twitter Inc and accelerated as it appeared he would have to go with it.
Before November 2022, only a single transaction involved 1.4 million shares. On November 8, nearly 3 million shares went just in one sale of nine.
Musk’s average realized price over the entire period is $279, which is more than double the current price, despite the year-end fire sale.
Musk no longer holds the title of the wealthiest person in the world, with a reduced net worth of $129 billion. Though, such setbacks are manageable with enough tenacity.
Instead of a collapse in valuation, Tesla still trades at about a 35% premium to the S&P 500 on forward price multiples.
Tesla produced 34,423 more cars during that time. The conflict lines up with Musk’s sales.
According to Musk, he had no other sales “planned” at various points last year. In addition, he also said that a failing stock price was a “buying opportunity.” He also claimed that Tesla is worth more than $4 trillion and said the business was considering a buyback program.
In a Twitter space, Musk said he would “definitely not” sell any more stock in 2023.
According to different opinions,
- Having jumped the Shark, Twitter now resembles My space
- Musk acted his way. Regrets? Banks Possess some: John Paul Davies
- 2022 has been hard on Tesla
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