Further, as many investors take their money out of Ark Innovation and other, similar funds, a self-perpetuating downward slide by the funds’ top holdings, including TSLA stock, could occur. We’re starting to see major outflows from momentum-style funds as investors rotate into other sectors and employ other strategies. ARK Innovation has now lost more than half of its value since its peak. Over the past year, however, the winds have shifted. As TSLA stock soared, so did Wood’s ARK Innovation ETF (NYSEARCA: ARKK). Prominent fund managers such as Cathie Wood of Ark Invest shot to superstardom thanks to their investments in Tesla many years ago. While Tesla was one of the first to deploy autonomous driving software, one wonders if its competitors such as Alphabet’s (NASDAQ: GOOGL) Waymo, are actually far ahead of Tesla in that area.Ī third issue for TSLA stock now is that it is a momentum name that lacks momentum. The self-driving system has often had a problem with so-called “phantom braking,” which occurs when a vehicle stops suddenly for a perceived hazard that doesn’t actually exist. That was the latest setback for Tesla’s vaunted self-driving program, which has always been full of promise but has thus far not quite lived up to the initial expectations of its cheerleaders.

Regulators forced Tesla to recall nearly 54,000 vehicles earlier this month because the company’s self-driving software at times has not halted Teslas completely at stop signs. Other ConcernsĪnother big worry for Tesla right now involves its self-driving software. The SEC, it appears, seems to think that Kimbal’s sale may have been illegal because of the knowledge he had about his brother’s forthcoming actions. Kimbal, it turns out, decided to sell $108 million of TSLA stock precisely one day before Elon published his tweet about selling his shares and the stock started to decline. However, Musk’s actions may well have all been legal as long as he disclosed them properly.īut the actions of Elon Musk’s brother, Kimbal, are murkier. Asking Twitter users whether to sell billions of dollars of a public company’s equity was unusual. The stock moved sharply lower immediately after Musk’s transaction. During the exact week that Musk was tweeting about selling his stock, Tesla’s shares reached their all-time high of $1,243. Of the 3.5 million Twitter users who voted on the question, 58% agreed that Musk should sell the shares, and he did unload 10% of his stake. He suggested that the move would make sense in light of the controversy about billionaires avoiding capital gains tax, since selling the stock would result in him having to pay a large amount of tax to the U.S. 6, he asked his followers if he should sell 10% of his TSLA stock. As you may recall, last fall Elon Musk launched a poll on Twitter.

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