Is Billionaire David Shaw Losing Faith in Tesla (TSLA) Stock?

  • D.E. Shaw sold 355,157 shares of Tesla (TSLA).
  • After the sale, the hedge fund now owns 764,620 shares.
  • Shares of TSLA stock are down over 20% year to date.
TSLA stock - Is Billionaire David Shaw Losing Faith in Tesla (TSLA) Stock?

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Tesla (NASDAQ:TSLA) stock is in focus after David Shaw’s D.E. Shaw & Company reported selling 30% of its stake during Q2. The acclaimed hedge fund manages over $128 billion in assets, of which $85.3 million is attributed to 13F securities.

Shaw has now trimmed his stake in TSLA stock for four consecutive quarters. He first purchased shares of the electric vehicle (EV) company during Q4 of 2019 and holds each stock in his portfolio for an average of 12.88 quarters. Back in 2019, shares of Tesla traded for less than $100, accounting for stock splits.

Meanwhile, CEO Elon Musk is in the midst of a legal battle concerning his proposed acquisition of Twitter (NYSE:TWTR). The pending litigation has cast a cloud over Tesla, as investors await a decision on whether the acquisition will go through. The legal battle between the two parties will begin on Oct. 17 in Delaware’s Chancery court and conclude on Oct. 21.

With that in mind, let’s get into the details of Shaw’s Tesla sale.

David Shaw Sells 30% of His TSLA Stock Position

During Q2, Shaw sold off 355,157 shares of TSLA. After the sale, he still owns 764,620 shares, representing a 0.6% portfolio allocation. Furthermore, the company is his 12th largest position out of 4,167 total positions. Shaw also owns TSLA put options against 428,100 shares, which is his 25th largest position with a 0.34% allocation. During Q2, he sold off 1% of his TSLA put options.

So, is Shaw losing faith in Tesla? Hedge funds are not required to disclose the reasoning behind their sales. However, Shaw is likely taking profits on a very successful investment. The last time he purchased shares was during Q2 of 2021 when TSLA traded in the $600-$700 range. Since then, he has sold shares of the company throughout every quarter. Still, Tesla remains the clear leader in the EV market. In the first half of 2022, the company commanded a 68% market share in the U.S.

Even Musk himself has been selling shares. Earlier this month, it was reported that the CEO had sold 7.92 million shares worth $6.88 billion. The proceeds will likely be used to fund the Twitter acquisition if Musk is forced to follow through. After the sale, he still owns 155.03 million shares, making him the largest shareholder by a wide margin.

On the date of publication, Eddie Pan did not hold (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 Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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