Tesla (NASDAQ:TSLA) CEO Elon Musk is continuing his selling spree. He started the week by selling another $906 million worth of Tesla stock. Just yesterday, he offloaded another $884 million, bringing his total close to $14 billion.
While the electric vehicle innovator faces other reasons for turbulence, including bearish forecasts for 2022 and regulatory scrutiny, these shares sales have led Tesla into a downtrend. In fact, many investors are likely surprised to see TSLA in the green today.
Investors may be shrugging off the latest share sales, but a few big questions remain. Essentially, not everyone agrees why Musk is selling Tesla stock.
With that in mind, let’s dive in to see what the experts have to say.
What Do the Experts Think About Tesla Stock?
CNBC’s Robert Frank buys into a common theory that Musk’s share sales are a result of a $15 billion tax bill that he faces. This follows a Twitter poll in which Musk asked his followers if they supported him in selling 10% of his holdings. However, according to Frank, the poll results weren’t the real driver for Musk’s decision:
“Since CEOs have limited windows in which to sell stock, and Musk would likely want to stagger the sales over at least two quarters, analysts and tax experts have been expecting Musk to start selling in the fourth quarter of 2021.”
Writing for Barron’s, Al Root largely agrees. However, Root analyzes that Musk’s particular pattern for offloading shares shows he is still bullish on Tesla stock. He thinks it is a good sign that Musk exercised his options now in 2021, as opposed until sometime in the new year.
Loup Ventures analyst Gene Munster isn’t fully buying into the taxes take, though. Instead, Munster believes that Musk’s decision to offload Tesla stock makes sense ahead of a potentially rough year of delayed growth. Although Munster is bullish on TSLA into 2022, he expects automakers to see lower sales and slower growth.
So what is the bottom line? While analysts are split on whether the Tesla stock sales are a result of Musk’s tax bill or forecasts for 2022, it seems Musk knows what he’s doing. Now investors just need to keep an eye out for whatever is ahead.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
