How Can Tesla Stock Musk Sale Affect Markets?


Mr. Musk had previously sold large slices of Tesla’s stock. Last year, it sold 15 million shares worth more than $16 billion in two months. These sales did not measurably lower Tesla’s price, but it is unknown whether the price would have risen if it hadn’t.

Tesla is a component in both the S&P 500 and the Nasdaq composite index. As well as being a barometer of how stocks in the United States are performing, both indices are mirrored by a large number of widely invested mutual funds.

S&P 500, which is accepted as the benchmark US index, weights companies according to their market values. With a value of approximately $900 billion, Tesla is one of the most influential stocks in the index.

For every dollar that Tesla stock fell on Tuesday, the S&P 500 lost 0.099 points, according to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices. That means the drop in Tesla’s shares accounted for about a tenth of the S&P 500’s drop on Tuesday.

“So it’s had a huge impact,” said Mr. Silverblatt, “but not the greatest.” With nearly three times the valuation of Tesla, Apple has much more influence. The stock’s 3.7 percent plunge on Tuesday further contributed to the overall index’s decline.

tesla is a famous volatile stock. Tuesday’s 12.2 percent drop was the worst daily drop since September 8, 2020, when it lost nearly 21 percent of its value. But Tesla shares have dropped nearly 12 percent twice in the past six months. November 9 and January 27.

Some – including Mr. Musk, sometimes – They suggested that Tesla was overvalued. Among those who believe in Tesla’s value, which is much higher than rival automakers for the size of its operations, most of the arguments depend on Mr. Musk’s management. Even Tesla admits it, citing it as a risk. in its most recent quarterly report“We are heavily dependent on Tesla’s techno king Elon Musk and our CEO. While Mr. Musk has spent a significant amount of time with Tesla and is very active in our management, he does not devote all his time and attention to Tesla.”


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