(Reuters) -Tesla shares edged higher on Thursday after filings revealed Chief Executive Officer Elon Musk had sold about $5 billion of the stock over the past few days, following his much-hyped Twitter poll.
The electric-car maker’s shares pared earlier gains and were up 0.6% at $1,074.80, after tumbling earlier in the week.
The share sale was his first since 2016 and comes after his weekend poll of Twitter users about offloading 10% of his Tesla stake, which comprises most of his estimated $281 billion fortune.
“I don’t think investors are reading into the news negatively,” said Oliver Pursche, senior vice president and advisor at Wealthspire Advisors in New York. “If you believe in the Tesla story, this should not impact you or change your mind.”
Tesla’s stock is in portfolios utilized by Wealthspire, Pursche said.
Filings showed Musk’s trust sold nearly 3.6 million shares in Tesla, worth around $4 billion, while he also sold another 934,000 shares for $1.1 billion to cover tax obligations after exercising options to acquire nearly 2.2 million shares.
The sale equates to about 3% of Musk’s total holdings. The options-related part of the sale was put in place in September, much before his Twitter poll.
Before the sale, Musk owned a 23% stake in Tesla, including stock options. He also owns other companies including SpaceX.
Musk’s move to sell his Tesla shares comes at a time when Washington proposes to tax the stockholdings of billionaires to help finance President Joe Biden’s social spending plan.
“Elon Musk doesn’t take a salary, he’s paid in big chunks of stock. At some point in time you have to take some of that concentration down,” said Art Hogan, chief market strategist at National Securities in New York.
“This is not novel. It just gets more attention because it’s such a high market-cap type, attention grabbing kind of company.”
Tesla did not respond to a request for comment.
While Tesla has lost more in market value than the combined market capitalization of Ford Motor Co and General Motors this week, retail investors have been net buyers, making net purchases of $157 million on Monday and Tuesday, according to Vanda Research.
They have also piled into shares of companies that are emerging as potential competitors to the electric-vehicle maker.
Fidelity’s brokerage website showed Rivian Automotive Inc, Tesla and Lucid Group were the most traded shares on Wednesday, with buy orders outnumbering sell.
Shares of Rivian jumped about 17%, a day after a stellar market debut that sent the company’s valuation over $100 billion. Lucid Group advanced 10%.
Fresh players in the EV space are likely drawing interest from institutions as well.
“Rivian’s valuation makes it a legitimate option for institutional investors who have previously only had Tesla to play the electric vehicle space,” wrote Nicholas Colas, co-founder of DataTrek Research, in a recent note.
Wall Street’s biggest institutional investors, including T. Rowe Price and BlackRock, are betting on Rivian to be the next big player in a sector dominated by Tesla, amid mounting pressure on automakers in China and Europe to eliminate vehicle emissions.
Four former and current Tesla board members, including Musk’s brother Kimbal Musk, have filed to sell nearly $1 billion worth of shares since Tesla’s market value surpassed $1 trillion late last month, according to filings and market data.
The company’s share price has made staggering gains over recent years and has epitomized the ebullient mood in U.S. markets and the optimism of small-time traders who have helped drive it up 51% this year and 1,300% from 2020 lows.
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