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Elon Musk sells $5 billion in Tesla shares after Twitter poll

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Tesla Chief Executive Elon Musk sold about $5 billion in shares, the billionaire reported in filings on Wednesday, just days after he polled Twitter users about selling 10% of his stake.

In his first share sale since 2016, Musk’s trust sold nearly 3.6 million shares in Tesla, worth around $4 billion, while he also sold another 934,000 shares for $1.1 billion after exercising options to acquire nearly 2.2 million shares.

The 4.5 million shares equate to about 3% of his total holdings in the electric vehicle manufacturer, which makes up the vast part of his estimated $281.6 billion fortune, according to Forbes.

Musk on Saturday polled Twitter users about selling 10% of his stake, helping to push down Tesla’s share price after a majority on Twitter said they agreed with the sale.

The stock sank 12% on Tuesday in a multi-day selloff that endangered the company’s position in the $1 trillion club, but recovered 4.3% on Wednesday.

The options-related sales were set up in September through a trading plan that allows corporate insiders to establish preplanned transactions on a schedule, the filing said. The sales of the option-related shares paid for associated taxes. It was not clear how or whether the trading plan related to Musk’s Twitter poll. Tesla did not respond to a request for comment.

The additional share sales were separate and provide Musk with sizeable reserves of cash, given his wealth is largely tied to his stakes in Tesla and SpaceX.

Musk has more than 20 million further stock options that are due to expire in August of next year.

If Musk carried out the 10% stock sale plan, it would be a slight negative near term, said Mark Arnold, chief investment officer at Hyperion Asset Management in Brisbane where Tesla is the top holding in its global fund.

“But the stock is pretty liquid and its not a huge percentage of total issued shares, so it shouldn’t have that much of an impact … we’re quite comfortable with the outlook for the business,” he said.

While Tesla has lost close to $150 billion in market value this week, retail investors have been net buyers of the stock. Some 58% of Tesla trade orders on Fidelity’s brokerage website on Wednesday were for purchases, rather than sales.

Retail investors made net purchases of $157 million on Monday and Tuesday, according to Vanda Research.

Tesla is now up more than 51% in 2021, thanks largely to an October rally that was fueled by an agreement to sell 100,000 vehicles to rental car company Hertz.

“The company itself is on fire, with strong results,” said Tim Ghriskey, a senior portfolio strategist at New York-based investment management firm Ingalls and Snyder.

Bullish sentiment returned to Tesla’s options on Wednesday, with about 1.1 calls traded for every put. Calls are typically used for bullish trades, while buying puts shows a bearish bias.

The company’s options accounted for about $109 billion in premium changing hands over the last two weeks, or about one in every three dollars traded in the U.S.-listed options market, according to a Reuters analysis of Trade Alert data.

 

(Reporting by Hyunjoo Jin, Noel Randewich and Greg Roumeliotis; Additional reporting by Sruthi Shankar, Subrat Patnaik, Medha Singh and Bansari Mayur Kamdar in Bengaluru; Katanga Johnson and Chris Prentice in Washington, Tom Westbrook in Sydney and Saqib Iqbal Ahmed and Ira Iosebashvili in New York; Editing by Peter Henderson and Richard Pullin)

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U.S. stock futures rise following Friday's omicron-sparked selloff – MarketWatch

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U.S. stock futures rose late Sunday, following a steep selloff Friday sparked by fears of the global economic impact of a worrisome new strain of COVID-19.

Dow Jones Industrial Average futures
YM00,
+0.70%

gained about 230 points, or 0.7%, as of 9 p.m. Eastern. S&P 500 futures
ES00,
+0.92%

and Nasdaq-100 futures
NQ00,
+1.14%

also showed solid gains.

Crude oil futures also rebounded Sunday from a Friday plunge, with benchmark U.S. crude
CLF22,
+5.24%

and Brent crude
BRNF22,
+4.70%
,
the international benchmark, jumping roughly 4% higher.

On Friday, Wall Street suffered its worst day in more than a year amid growing concerns over the new omicron variant of COVID-19. The World Health Organization’s technical advisory group on Friday declared it a “variant of concern,” and a number of countries imposed flight bans from countries in southern Africa, where the variant was first discovered.

Little is known about omicron, but investors Friday braced for bad news.

Read: U.S. health officials urge caution, but not panic, over omicron variant

In a holiday-shortened session, the Dow Jones Industrial Average
DJIA,
-2.53%

slumped 905.04 points, or 2.5%, to 34,899.34, with the index logging its worst daily drop since Oct. 28, 2020, according to FactSet data. The S&P 500 
SPX,
-2.27%

 fell 106.84 points, or 2.3%, to 4,594.62, and the Nasdaq Composite Index
COMP,
-2.23%

 sank 353.57 points, or 2.2%, to 15,491.66.

“The pandemic and COVID variants remain one of the biggest risks to markets, and are likely to continue to inject volatility over the next year(s),” Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, wrote in a Friday note. “It’s hard to say at this point how lasting or impactful this latest variant will be for markets.”

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Canada to Tap Maple Syrup Reserves to Combat Supply Crisis – TMZ

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Canadians to get biggest drop in gasoline prices since 2009 over COVID variant fears – Yahoo Canada Finance

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Canadians should experience the fastest drop in gasoline prices in nearly 13 years on Sunday as fears about a virulent new COVID-19 variant are expected to provide a break of 11 cents per litre at the pumps.

Dan McTeague, president of Canadians for Affordable Energy, said the national average price could drop to about $1.32 per litre but begin to rise again midweek.

“(Sunday) represents the single largest decrease at the pumps we’ve seen going back to 2009,” he said in an interview.

Global crude oil prices plunged Friday over fears about a new COVID-19 variant called Omicron that prompted Canada to ban entry for foreign nationals who travelled through southern Africa.

The January crude oil contract fell 13.1 per cent or US$10.24 on Friday and currently stands at US$68.15 per barrel.

The decrease came as U.S. stock markets closed early Friday because of the Thanksgiving holiday.

“Sunday and Monday are going to be the best days for Canadians to fill up, including British Columbia,” McTeague said

Even residents of flood-ravaged B.C. will save on the province’s high gasoline prices despite facing rationing because severe flooding has shut both the Trans Mountain pipeline and the province’s lone refinery.

Drivers of non-essential vehicles can only purchase up to 30 litres per visit to a gas station in the Lower Mainland, Sunshine Coast, Sea to Sky area, Gulf Islands and Vancouver Island.

East Coast residents won’t reap the immediate benefits of Sunday’s price drop because its regulated regional system averages price movements. That provides price predictability but blunts price discounts.

Despite the upcoming decrease, national gasoline prices have surged nearly 43 per cent in the past year as the reopening of the global economy from pandemic lockdowns prompted a recovery in crude prices.

McTeague suggested Canadians shouldn’t get too comfortable with the energy savings. He said prices are expectd to increase as OPEC and its allies, who are meeting on Monday, will likely refuse to increase production any further. Energy traders realize that Friday’s decrease was overdone and “flies in the face of fundamentals,” he added.

“My sense is that the decreases that we saw were a little exaggerated and overbought, and for that reason I think we might see a little bit more balance come back to the markets and fundamentals by Wednesday,” McTeague said.

“Unless there’s further unsettling news of greater and further lockdowns, I would expect that oil prices are probably going to recover US$3 to US$4 a barrel by Monday or Tuesday, which means by Wednesday or Thursday we could be looking at increases in the order of four or five cents a litre.”

McTeague said some gasoline savings will continue for a couple of weeks, but he foresees crude climbing back to about US$90 a barrel, which would translate into prices in Canada exceeding $1.50 per litre.

Impending carbon tax increases will further boost prices.

A tax of 2.5 cents per litre, including HST, will take effect on April 1, 2022. It will be followed in December by the clear fuel standard that will add another 18.1 cents per litre including HST, said McTeague.

Adding to the inflation pressure is the Canadian dollar which is less valuable than when it was at par the last time crude prices were around US$80. That reduces the purchasing power for all kinds of products, including energy and food.

The Canadian Automobile Association said that as of early Saturday morning, Manitoba had the lowest average pump price of $1.35/L, followed closely by Alberta at $1.377, while Newfoundland and Labrador was the highest at $1.583 with British Columbia at $1.558.

This report by The Canadian Press was first published Nov. 27, 2021.

Ross Marowits, The Canadian Press

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