Musk’s 10% Stake Sale Removes Overhang, Fueling Tesla Rally
Musk’s 10% Stake Sale Removes Key Overhang, Fueling Tesla Rally
(Bloomberg) -- Tesla Inc. rose after Chief Executive Officer Elon Musk said he’s sold enough stock to make his total sales about 10%, removing a key overhang on its shares.
The electric-vehicle maker closed 7.5% higher, propelling its market value back above $1 trillion on Wednesday. Musk sold about $854 million worth of shares, according to the latest filings with the U.S. Securities & Exchange Commission.
He had earlier said in an interview with the satirical website Babylon Bee that he sold enough of his Tesla stock to reach a target of reducing his stake in the company. This would more than cover an estimated tax bill of over $10 billion because of stock options he’s expected to exercise. Later Wednesday, Musk said he’s “almost done” in response to a tweet about his share shales.
“This declaration by Musk removes an overhang on the stock with selling pressure and negative perception issues now removed and the focus back on fundamental drivers for the Street,” Wedbush analyst Dan Ives wrote in a message. “Some good news after a dark few weeks for the Tesla bulls.”
Musk’s sales of shares had put pressure on the stock, which peaked just before he took an over-the-weekend Twitter poll last month on whether he should reduce his holding. They’d tumbled about 24% through Tuesday since closing at a record high on Nov. 4.
Musk sold about $325.7 million more shares, according to a U.S. Securities & Exchange Commission filing, in addition to another $528 million revealed in separate filing. His comments to Babylon Bee suggest he has since disposed of even more stock.
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