Tesla shares extend selloff following Musk’s tweets

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Tesla Inc stock extended its recent selloff on Monday as investors reacted to recent share sales of CEO Elon Musk totaling $ 6.9 billion, as well as his most recent tweets.

Tesla’s stock closed nearly 2% lower at $ 1,013.39, leaving the company’s market capitalization down about $ 207 billion from before Musk began selling shares last week.

The latest drop in shares follows a Sunday dispute on Twitter https://www.reuters.com/business/autos-transportation/elon-musk-spars-with-bernie-sanders-offers-sell-more-tesla-stock- 2021- 11-14 between Musk, the richest person in the world, and Bernie Sanders after the US Senator asked the rich to pay their “fair share” of taxes.

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During Monday’s session, Tesla was trading as low as $ 978.60, pushing its stock market value below the $ 1 trillion mark on an intraday basis for the second time in four sessions. Tesla first hit the $ 1 trillion milestone late last month.

Tesla’s stock plummeted after the sale based on a Twitter poll last week. And Musk’s Sunday tweet mocking a high-level politician could add pressure to the stock in the coming weeks, ”said Kunal Sawhney, CEO of equity research firm Kalkine Group.

“By offloading shares worth billions of dollars, Elon Musk is likely to build up a fiscal account of approximately $ 15 billion.”

Musk sold 6.36 million Tesla shares last week after pitching the idea in a Twitter poll at https://twitter.com/elonmusk/status/1457064697782489088. It would need to offload around 10 million more to fulfill its commitment to sell 10% of its stakes in the electric vehicle maker.

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Fueled by Wall Street’s thirst for electric vehicle makers, Tesla shares have risen more than 140% over the past 12 months. The recent selloff took the stock to its lowest level since late October.

Also on Monday, Rivian Automotive jumped nearly 15%, with the Amazon.com-backed electric vehicle maker now up about 90% from its initial public offering last week.

Reflecting the enthusiasm of retail investors, Tesla and Rivian were the most traded stocks on Fidelity’s online brokerage https://eresearch.fidelity.com/eresearch/gotoBL/fidelityTopOrders.jhtml, with more than two buy orders for each sales order.

LIMITS OF SUPPLY OF CHIPS

On Saturday Musk https://bit.ly/3ChQVIU asked a Twitter user not to “read too much” in comments from PepsiCo CEO Ramon Laguarta on the expectation of his first Tesla Semi truck delivery in the fourth quarter.

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“As publicly mentioned, Tesla is constrained by short-term chip supply and long-term cell supply,” Musk tweeted. “It is not possible to produce additional vehicles by volume until both constraints are addressed.”

Tesla weathered the pandemic and global supply chain crisis better than rivals, posting record revenue for the fifth consecutive quarter.

Meanwhile, investor Michael Burry of “The Big Short” fame again targeted Musk, tweeting https://twitter.com/michaeljburry/status/1460124507109134339, “@elonmusk borrowed $ 88.3 million. of stock, sold all of his mansions, moved to Texas, and asks @BernieSanders if he should sell more stock. He doesn’t need cash. He just wants to sell $ TSLA. “

(Reporting by Sruthi Shankar and Subrat Patnaik in Bengaluru Further reporting by Anisha Sircar in Bengaluru, Saikat Chatterjee in London, Ira Iosebashvili in New York and Noel Randewich in Oakland, California. Editing by Anil D’Silva and Matthew Lewis)

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