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With Tesla shares significantly underperforming relative to the Nasdaq 100 benchmark over the past few days, market chatter has gathered around Elon Musk’s potential liquidation spree as the most likely reason for the EV giant’s share price weakness of late. That speculation has now exploded, according to the Tesla CEO’s most recent filings with the SEC.
As we expected @tweet Sold 22 m TSLA dollars Shares (float 0.8%) for $3.58 billion between Monday and Wednesday, at an average price of $162.81. Over the three-day period, TSLA fell -12.4% vs. NDX +1.5%. Since the TWTR deal closed on 10/28, TSLA -29% vs. NDX +4%. The average price Elon received was $163 per share.
– Gary Black (@garyblack00) December 15, 2022
Elon Musk sold 21.995 million shares of Tesla over the past few days, making $3.58 billion in the process, according to Form 4 filed with the Securities and Exchange Commission.
Recently, a consortium of banks that provided Elon Musk with $13 billion in debt financing for his Twitter takeover maneuver floated the idea of replacing $3 billion of unsecured debt, which carries an interest rate of 11.75 percent, with a margin loan of the same size but bearing Lower interest rate. The change will save significant costs for Twitter, which now faces annual interest costs of about $1.2 billion. However, the margin loan carries significant risks as Musk will be required to post collateral by selling Tesla stock in the event the EV giant’s share price breaches the loan’s margin limits. It is not yet clear whether Elon Musk’s recent wave of liquidations is intended to boost Twitter’s liquidity and/or smooth the move toward the proposed margin loan.
Of course, as mentioned earlier, Tesla has chronically underperformed the Nasdaq 100 benchmark in recent days. As an illustration, the index has risen just over 1 percent in the past five trading days, yet Tesla shares are down nearly 10 percent over the same time frame. While some internal factors have accelerated downward pressure on the stock recently, that weakness has persisted since Tesla reported its Q3 2022 earnings.
First, in late October, Tesla cut prices for its electric vehicles by as much as 9.4% in China. At the time, that decision was justified as a shrewd attempt to take advantage of the soon-to-expire 12,000 yuan subsidy that China offers on all electric vehicles retailing for less than 300,000 yuan. The price cut allowed the standard Tesla Model Y range to qualify for this incentive by lowering the model’s price to 288,900 yuan.
Tesla fans from China have reported that Tesla is now offering an additional 6,000 yuan discount in addition to the current 4,000 yuan insurance offer. So, that’s a total discount of 10,000 yuan ($1,429).
This is for new cars that have just been produced and do not have buyers yet.
– Troy Teslik (@TroyTeslike) December 7, 2022
However, this expected temporary boost in demand has yet to materialize, given the fact that Tesla has now started offering a 10,000 yuan discount for new orders. Given China’s importance to Tesla’s earnings metric, this weak demand turns into a significant headwind for the stock.
Welcome everyone. Tesla’s delivery estimates for the fourth quarter of 2022 were as follows on December 5:
• My estimate: 428 thousand
• Analysts consensus: 430 thousand
My estimate of 428k would mean 42.8% annual growth for the full year. Tesla’s goal is “just under 50%.”
The next update on Twitter will be on December 15th. pic.twitter.com/hbir5yFWFL
– Troy Teslik (@TroyTeslike) December 13, 2022
Tesla continues to stick to its guidance of increasing production by 50 percent annually for the foreseeable future.
Welcome everyone. I want to explain why Tesla China may cut production this month. Tesla stock was really high at the end of the third quarter. Ideally, they don’t want to increase it further. To do this, they would need to deliver all production minus exports.
– Troy Teslik (@TroyTeslike) December 14, 2022
However, many analysts now confirm that this directive is still under threatespecially as the company looks to reduce its production footprint in China as we approach the end of the year.
What is the status of Tesla’s “full self-driving” initiative? are you getting better How does it compare to other companies’ systems?
Data based thread below:
– Taylor Ogan (@TaylorOgan) December 13, 2022
Going forward, Tesla continues to take the heat on the safety scorecard of its Advanced Driver Assistance System (ADAS), dubbed Autopilot. In August, the California DMV accused Tesla of misleading customers regarding the capability of its Autopilot system. A customer also sued the company that same month for “deceptive marketing”. Then, in October, reports emerged that the US Department of Justice, as well as the Securities and Exchange Commission, were maintaining ongoing investigations into Tesla’s Autopilot allegations. According to a tabulator by Taylor Ogan, CEO of Snow Bull Capital, “The average miles per disengagement in the FSD beta is getting worse*, down 54% compared to last year.”
It’s no surprise, then, that Tesla has now abandoned its current approach of relying solely on its vision-based autopilot system, which consists of eight high-resolution cameras and a high-tech neural network to interpret incoming visual signals, and is now working to reintegrate high-resolution radar into its sensor array. Her own.
New: QAnon believers are high @tweetAn influx of far-right memes and complaints. It has not captured the main battlefield of online information warfare. He has become a prophetic figure on par with Donald Trump https://t.co/trNKlYL0WH
– Drew Harwell (@drewharwell) December 14, 2022
Finally, Elon Musk’s approach to free speech on Twitter smears the Tesla brand, especially when combined with his controversial and politically charged tweets. On Tuesday, for example, Musk tweeted a message containing a rabbit emoji, which many QAnon members interpreted as a tribute to the movement’s founding icons.
TSLA dollars Survey in Germany.
63% of respondents said Musk’s behavior has negatively affected their perception of Tesla.
As a result, it is now the least liked automaker in Germany (9% liked / 69% disliked / 22% neutral).
This is a disaster as competition for electric cars heats up. pic.twitter.com/vW88atR6bB
– Ship of Wall Street (@Biohazard3737) December 14, 2022
In fact, according to a recent German poll, 63 percent of respondents said Elon Musk’s behavior had negatively affected their perception of Tesla.
Jonas makes TSLA dollars 2023 Best Pick: “..the only company capable of selling electric vehicles at ICE-like profit margins and with an undisplayed presence in the battery supply chain. With the launch of the Cybertruck and Tesla Semi in 2023, the company is expanding its automotive product lineup.”
– Carl Quintanilla (@carlquintanilla) December 14, 2022
However, all is not lost. In a new investment note, Morgan Stanley analyst Adam Jonas identifies Tesla as “the only company capable of selling electric vehicles at ICE-like profit margins and having an undisplayed presence in the battery supply chain.”
#China: It will promote the change of automobile consumption, the promotion of electric vehicles, and the Internet of vehicles. It will boost home buying and associated consumption. It will reduce the burden that the family bears on raising children, parenting and education.
– CN Wire (Sino_Market) December 14, 2022
Moreover, with China now scaling back its coronavirus-free policies and working hard to revive its flagging economy, Tesla’s current bout of weak demand is likely to be fleeting.