Tesla (NASDAQ:TSLA) CEO Elon Musk generated many headlines over the final quarter of 2021 as he began offloading shares of Tesla stock. When he first posed the question of if he should sell by way of Twitter (NYSE:TWTR) poll, it raised many eyebrows. As he continued selling off shares, much speculation arose as to his motives. Some speculated that he wanted to avoid a looming tax bill while others cited general concerns regarding the electric vehicle (EV) industry’s growth potential for the year ahead.
Now the question is what Musk intends to do with the billions he has netted from the share offloading. While Musk hasn’t made any statements about his plans, one expert recently floated that he may be focusing on his space company. While SpaceX is still privately held, any momentum it generates could certainly carry over to public space stocks.
Space Stocks: What to Watch for in 2022
One CNN Business analyst recently speculated that it was certainly possible, if not likely, that Musk would be putting at least some of his new profits into the development of SpaceX. As he notes,
“Some footnotes in the filing disclosing details of the sales, along with the timing of the last two equity infusions into SpaceX, raise the possibility that Musk is shifting some of his wealth from publicly-traded Tesla (TSLA) into shares of his privately-held company SpaceX.”
There’s no denying that this would be an opportune time for Musk to redouble his efforts in SpaceX. The space race is set to continue in 2022. Furthermore, CNet reports that it is likely to become more crowded and dangerous as more companies take significant steps toward making the planets beyond Earth more accessible. SpaceX is wasting no time in kicking off the new year with its Starlink 4-5 mission set to launch on Thursday, Jan. 6 from NASA’s Kennedy Space Center.
If Musk were to focus more of his attention on SpaceX, it would generate considerable momentum for major space stocks. Market analysis platform Quiver Quantitative tracks stocks that have the highest likelihood of appearing in one of Musk’s tweets. When InvestorPlace examined this list a few months ago, every name in the top 10 was linked to space, operating mostly in the aerospace and defense technology spaces. Today, many names such as Maxar Technologies (NYSE:MAXR), Iridium Communications (NASDAQ:IRDM) and Lockheed Martin (NYSE:LMT) still rank highly on that list as measured by degrees of separation.
The big picture here is quite clear. According to Quiver Quant’s data, Musk is still quite interested in space stocks. If SpaceX were to become his top priority, it would generate momentum for stocks such as Virgin Galactic (NYSE:SPCE) and Astra (NASDAQ:ASTR). Indeed, these stocks might go to the moon in more ways than one.
What Comes Next
As of now, no one knows what 2022 will bring for Musk. While turning to SpaceX would make a lot of sense, he has consistently proven to be unpredictable.
What we do know is that 2022 will be big for space stocks across the board. There’s going to be considerable momentum behind the sector regardless of what Musk does. However, if the CEO with the power to influence financial markets with just a tweet decides to focus on SpaceX, space stocks may not stop at the moon. Therefore, this is a sector that everyone should be watching.
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.
