Elon Musk Announces That SpaceX Plans To Capture CO2 And Turn It Into Rocket Fuel
Elon Musk has been very active recently. In addition to tweeting about Tesla‘s decision to accept Dogecoin as payment for merch, he announced that SpaceX would start “a program to take CO2 out of atmosphere & turn it into rocket fuel”.
Just two weeks ago, reports indicated that Musk believed that SpaceX needed to ramp up production of its Raptor engine to avoid financial problems. In this light, it is interesting to see that SpaceX plans to start a new program which will likely require significant investments.
Currently, the world’s largest carbon capture plant is located in Iceland. The plant uses geothermal energy to capture carbon dioxide from the athmosphere and store it underground. The technology is still in its infancy, and large-scale cost-effective plants are yet to be built.
Traders Focus On Musk’s Stock Sales And Fed Outlook
Stock traders have ignored Musk’s recent announcements on SpaceX and Dogecoin and focused on his stock sales.
The recent filings with the SEC indicated that he sold an additional $906 million worth of Tesla shares. In total, he has already sold more than $11.5 billion worth of Tesla stock after his Twitter poll on selling a 10% stake in the company.
Tesla stock is down by almost 25% from highs that were reached at the beginning of November, which means that it is trading in the bear market territory.
While Musk’s share sales served as a negative catalyst for Tesla stock, investors also remained worried about Tesla’s high valuation at a time when the Fed could aggressively cut its asset purchase program and start raising rates in the first half of 2022.
Analysts expect that Tesla will report earnings of $6.06 per share in 2021 and $8.2 per share in 2022, so the stock is trading at 115 forward P/E. Sometimes, any news from Musk, whether he is talking about his other innovative businesses or cryptocurrencies, helps attract more interest to Tesla. This time, it looks that the market is seriously worried about his stock sales and the rich valuation of the company.
Most likely, Tesla’s near-term direction will depend on the outcome of tomorrow’s Fed meeting. If the Fed is hawkish and high-growth stocks find themselves under pressure, Tesla will continue its pullback.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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