Science

Why does Elon Musk keep selling Tesla stock? 3 experts evaluate sales.

Tesla (NASDAQ: TSLA) CEO Elon Musk continues his sales campaign. It started the week by selling an additional $ 906 million in Tesla stock. As recently as yesterday, it downloaded an additional $ 884 million, bringing its total to nearly $ 14 billion.

Source: Ivan Marc / Shutterstock.com

As the EV innovator faces other reasons for turbulence, including a bearish forecast for 2022 and a regulatory overhaul, those stock sales have pushed Tesla into a downtrend. In fact, many investors are likely to be surprised to see TSLA in the green today.

Investors can ignore the latest stock sales, but some big questions remain. Essentially, not everyone agrees why Musk is selling Tesla stock.

With that in mind, let’s dig deeper to see what the experts have to say.

What do the experts think of Tesla’s stock?

CNBC’s Robert Frank adheres to a common theory that the sales of Musk’s stock are the result of a $ 15 billion tax bill he faces. This follows a Twitter poll in which Musk asked his followers if they supported him in selling 10% of their stakes. However, according to Frank, the survey results weren’t the real driver for Musk’s decision:

“Given that CEOs have limited windows to sell shares and Musk would likely want to stagger sales over at least two quarters, analysts and tax experts expected Musk to start selling in the fourth quarter of 2021.”

While writing for Barron’s, Al Root largely agrees. However, Root analyzes that Musk’s particular model for dumping stocks shows that he remains bullish on Tesla stocks. He thinks it’s a good sign that Musk has exercised his options now in 2021, rather than until the start of the new year.

However, Loup Ventures analyst Gene Munster does not fully endorse the taxes collected. Instead, Munster thinks Musk’s decision to divest Tesla shares makes sense ahead of a potentially difficult year of lagged growth. While Munster is bullish on TSLA through 2022, he expects automakers to see slow sales and growth.

So what is the result? While analysts are divided on whether Tesla’s stock sales are the result of Musk’s tax bill or the 2022 forecast, it appears Musk knows what he’s doing. Now investors just need to be on the lookout for what’s coming.

As of the date of publication, Samuel O’Brient had no (directly or indirectly) position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.

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