- Some institutional Tesla investors are offloading stock because they think future growth will be limited, Reuters reports.
- Tesla shares have dropped 30 percent this year and are worth less than half of what they were at their peak in 2021.
- Complaints from exiting investors include boss Elon Musk’s non-Tesla distractions.
Tesla investors have endured a roller coaster ride of wins and losses over the last four years, but for some, it’s now time to get off and find another attraction. Certain big stockholders are selling their shares because they think there are no more big growth opportunities, a report says.
The value of the Tesla’s stock ballooned to 14 times its original size in the 18 months leading up to November 2021, but institutional investors (who buy stock for funds and large entities) don’t forsee the same kind of thing happening again, and have watched as the value has more than halved since then, and dropped 30 percent this year alone.
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Many of Tesla’s stockholders have stuck with it through minor slumps over the years, and been rewarded as prices recovered, but with the firm now under intense pressure from Chinese automakers and the global EV market cooling, they’re starting to think that Tesla and its shares are overvalued.
“I think the story is over, is the best way to say it,” investor Ross Gerber told Reuters, explaining that his Gerber Kawasaki Wealth & Investment Management had reduced its 500,000 Tesla share haul by around 40 percent by selling stock during the course of this year.
Some investors aren’t happy with CEO Elon Musk’s tendency to become consumed by non-Tesla matters, while others, including Graham Tanaka, are concerned about the technical and regulatory obstacle that stand in the way of Tesla creating truly autonomous cars. Tanaka’s fund began buying Tesla stock at $2 in 2011, but has jettisoned all of his Tesla stock over the last six months, the report says.
Data from investment tracker Morningstar revealed that of 18 mutual funds that had held Tesla stock since 2019, when it was still worth less than $20, only five had acquired more shares during the last quarter, while 10 had offloaded stock.
But some investors remain bullish about Tesla’s potential, pointing to the robotaxi that the firm will reveal in August as one reason to hold on to, and buy more stock.
