We are living in the post-stock-split era of the Tesla (TSLA) shares and the market is showing a mixed trend after this happened. There have been a few major developments this past week which led to the Tesla share price closing at $270.21 on Friday 2nd September 2022.
A large institutional investor Ark Invest with its famous founder and CEO Cathie Wood sold around 151,000 Tesla shares on Thursday. This sums up to around $41M worth of Tesla stock sold by the company. TSLA is Ark’s #1 investment and accounts for 9.94% of its total investment worth around $793 million.
When the news of Cathie selling TSLA hit social media, both bulls and bears had a difference of opinion (of course) on why she sold the stock at this point. Here are some of the opinions that the Tesla retail investors shared on Twitter.
On the other end, Tesla CEO Elon Musk reacted to an email sent to a Tesla investor by the credit rating company Moody’s. “Moody’s is irrelevant,” said Musk in a tweet response to a Tesla long-term investor Dave Lee. While Moody’s thinks “Tesla is not investment grade”.
Moody’s has refused to upgrade the investor credit rating for Tesla in the current scenario. The point Moody’s raises is that Tesla is relying on 2 products to make the most sales (Tesla Model 3 sedan and Model Y electric SUV). And Model 3 was launched back in 2017 (an old product).
The considerations are not so much of a quantitative nature, but more qualitative. Importantly, we are looking for a broadening of the company’s product line-up. Today, Tesla remains narrowly reliant on primarily two models, albeit highly successful ones. Note also in this respect that one of the models was first introduced in 2017. More concrete prospects for a broader vehicle line-up would be regarded as a positive development in this respect.
Moody’s email to an investor.
It’s a fact that the Tesla line-up is expanding slowly but this is due to the extreme demand for the Model 3 and Model Y EVs. Tesla has to constantly ramp up production globally to catch up with the demand.
Apple, Inc. (AAPL) is one example of a super successful company with a limited number of successful products. Tesla can be the same and is on a similar pattern as of now.
However, Tesa is working on other products like the Tesla Semi roll out is planned for this year’s end and Cybertruck production is also scheduled for late next year.
Moody’s also totally forgot that Tesla also has a sustainable energy arm (Powerwalls, Megapacks, and solar) which is thriving with big projects both in the US and offshore.
Potentially, the start and ramp-up of the Cybertruck production can transform the Tesla (TSLA) stock in the future.
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4 replies on “Cathie Wood of Ark Invest sells $41M worth of Tesla (TSLA) shares, “Moody’s is irrelevant,” says Elon Musk”
Well, Wood also sold Tesla, bought the dip of Zillow, and then dumped Zillow almost immediately last November.
The thing is, I followed her and bought some Zillow too, but I sold at a loss… XD
Okay
I understand wood is trying to parlay Tesla stock into undervalued stock so she can make a big gain later. She will have to wait years. I’m not selling any for at least 5-10 years from now.
TSLA long is Musk-approved!