Musk may continue to sell Tesla, with or without Twitter

Traders and investors are speculating that Elon Musk will sell more shares of Tesla Inc. by the end of 2022, according to the latest MLIV Pulse study.

Some 75% of 1 562 respondents, including portfolio managers and retail traders, say Musk will not own Twitter Inc. — a deal that led to him selling about $8.5 billion worth of Tesla shares in April. A third of respondents expect it to pay off more than $1 billion to the social media company rather than live to see its $44 billion takeover at $54.20 a share, while 27% believe the court makes him pay $1 billion.

Musk will likely sell the stock no matter what happens with the Twitter deal,” said Mike Lucas, chief executive officer of TrueMark Investments, sharing the opinion of 68% of those polled.
Such news could signal a further fall for Tesla stock, which has fallen about 16% this year, more than the S&P 500’s 13.3% drop.

Musk, 51, is the richest man in the world, his $260 billion fortune comes largely from his stake in Tesla, but he’s been dumping stocks lately: in November, he conducted a Twitter poll about selling 10% of his position. and then sold over 15 million shares over the next few months.

Musk sold about 9.4 million shares of Tesla in April following the deal to buy Twitter, amounting to $25 billion worth of shares sold in six months. He is now seeking to back out of the agreement, which will be the subject of an expedited trial.

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Whatever the outcome, investors expect Tesla shareholders to welcome the end of the case.

At the same time, survey respondents aren’t as confident about Tesla’s upside potential compared to the other four huge capitals in the S&P 500. About a quarter said Microsoft Corp. offers the most potential, about the same share as Amazon.com, Alphabet Inc. received 21% of the vote, while Apple Inc. got 18%. Tesla came last with 12.5%.

Competition in electric vehicle manufacturing is on the rise as most of the world’s automakers are working on their own models. The macroeconomic background is also difficult: the US economy has been shrinking for two quarters in a row.

Investors in the survey expect value stocks to outperform growth stocks over the next six months, although the biggest tech companies are likely to record at least modest gains before the end of the year.