- Some institutional Tesla investors are selling off shares because they think future growth will be limited. Reuters reports.
- Tesla shares are down 30 percent this year and are worth less than half of what they were at their peak in 2021.
- Complaints from departing investors include boss Elon Musk’s non-Tesla distractions.
Tesla investors have endured a rollercoaster ride of gains and losses over the past four years, but for some, now is the time to get out and find another attraction. Some major shareholders are selling their shares because they believe there are no major growth opportunities left, according to a report.
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The value of Tesla shares rose to 14 times its original size in the 18 months leading up to November 2021, but institutional investors (who buy shares for funds and large entities) don’t foresee the same kind of thing happening again, and have seen how its value has more than halved since then, falling by 30 percent this year alone.
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Many Tesla shareholders have stuck with small downturns over the years and have been rewarded when prices have recovered, but now that the company is under heavy pressure from Chinese automakers and the global EV market is cooling, they are starting to think that Tesla and its stock are overvalued.
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“I think the story is over, that’s the best way to put it,” investor Ross Gerber said Reutersexplaining that his Gerber Kawasaki Wealth & Investment Management had reduced his holding of 500,000 Tesla shares by about 40 percent by selling shares over the course of this year.
Some investors aren’t happy with CEO Elon Musk’s tendency to get consumed with non-Tesla matters, while others, including Graham Tanaka, are concerned about the technical and regulatory hurdle standing in Tesla’s way of truly autonomous cars to create. Tanaka’s fund started buying Tesla shares at $2 in 2011, but has jettisoned all of its Tesla shares in the past six months, the report said.
Data from investment tracker Morningstar revealed that of the 18 mutual funds that had held Tesla shares since 2019, when they were worth less than $20, only five had acquired more shares in the last quarter, while 10 had sold shares.
But some investors remain optimistic about Tesla’s potential, pointing to the robotaxi the company will unveil in August as a reason to hold on and buy more shares.
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