A big week for electric vehicles with shares in Tesla battered by the stock-selling antics of founder Elon Musk and the arrival of a bright new, but smaller, rival in Rivian and its key supporters, Amazon and Ford.
Tesla shares lost 15.4% last week which saw CEO Musk commence with his plans to sell a huge block of his holdings – which he did – nearly $US7 billion worth – ostensibly for tax planning reasons.
Tesla closed down 2.8% on Friday at $US1,033.42 (still valuing the EV maker at more than $US1 trillion) on a day when all market measures ended well into the green.
But last week’s float of Rivian capitalised on the sell-off in Tesla very nicely.
Shares of Rivian closed rose 5.6% on Friday at $US129.95 and valued at more than $US106 billion. It’s up around 66.6% since its debut on Wednesday.
Musk’s billions in share sales overshadowed smaller sales by chair, Robyn Denholm and a former and current director – the sales left the market wary about Tesla for the moment.
It was Tesla’s worst one-week performance in 20 months. It was also the stock’s worst week ever excluding declines that occurred in February and March 2020 — as fears about the potential damage the coronavirus pandemic could do to the US and global economies.
Musk — who still owns more than 167 million shares of Tesla, according to financial filings out Friday morning sold nearly $US5.7 billion worth of shares. A later disclosure on Friday showed more sales, taking the total of nearly $US7 billion.
Musk sold shares in part to satisfy tax obligations related to an exercise of stock options. Before his sale plan was made public, Musk triggered a sell off on Monday and Tuesday after he asked his 62.5 million Twitter followers to vote in an informal poll, telling them their vote would determine the future of his Tesla holdings.
Friday’s filings reveal he knew some of his shares were slated for sale last week, so the Twitter poll idea was nothing more than Musk cynically manipulating his followers – not that many would take notice.
Tesla shares are still up around 46% year to date in 2021 but Ford shares (a shareholder in Rivian) are up 120%, GM shares are up 51% and VW shares have risen more than 66% year to date.
Rivian raised $US11.9 billion in its market debut Wednesday, making its IPO the largest in the world this year so far.
Rivian now ranks the second most valuable car manufacturer in the behind Tesla, though it expects to record less than $US1 million in sales for the third quarter.
Musk was no doubt being sarcastic when he taunted Rivian in a tweet on Thursday.
“There have been hundreds of automotive startups, both electric and combustion, but Tesla is [the] only American carmaker to reach high volume production & positive cash flow in the past 100 years,” Musk said in the tweet.
Rivian has no recorded revenue and it expects less than $1 million in sales for the third quarter. It says it has 55,400 preorders for its R1S SUV and R1T pickup truck and a contract to build 100,000 electric vans with Amazon by 2030.
But Tesla now has a well-funded US rival backed by two big shareholders – one with more online experience than Musk in Amazon and the other with enormous experience in making cars and trucks (pickups).