Elon Musk
Hannibal Hanschke-Pool/Getty Images
Sometimes the stock market is odd—and it looks like Thursday was one of those odd days for Tesla investors. The company managed to disappoint bulls by not doing something it never said it would do.
Tesla stock (ticker: TSLA) fell 6.1% on Thursday, with shares closing at $1,003.80 each. The S&P 500 fell 0.7% and the Dow Jones Industrial Average was essentially flat, ending the day at 35,754.69. points.
No news is a disappointment because Dec. 9, 2021, according to social media, was supposed to be a big day for Tesla stock. The reason? Just because. The 12/9 date gained momentum in meme-like fashion with Tesla bulls wondering if there could be a product announcement or a stock split.
The 12/9 noise got loud enough to force people, including Barron’s, to research possibilities. However, the investors and analysts we queried didn’t think anything material was going to happen Thursday.
“We believe [12/9] will be a non event and no major risk to the stock ,” Wedbush analyst Dan Ives told Barron’s, adding, “it’s Tesla so who knows.”
A stock split would require a board meeting. Tesla didn’t respond to a request for comment about its board meeting dates. The company holds about six board meetings a year. There is no way to know if one recently took place.
And at a Wall Street Journal conference earlier this week, CEO Elon Musk said there was no news he was aware of coming on Dec. 9. That took some wind out of bulls’ sails.
Still, what started out as fun banter might have led to stock-market disappointment, based on Thursday’s reaction.
There are other reasons Tesla was down Thursday, however. Other EV stocks have fallen as high-growth stocks have sold off. The Nasdaq Composite Index slipped 1.7%–a worse drop than in the S&P 500 or Dow. Rivian Automotive
(RIVN), which had no 12/9 murmurs associated with it, saw its shares slide 5.5%.
Overall, Tesla stock is still doing just fine. Shares have risen about 34% over the past three months, although they are still down about 18% since Musk said he would sell some stock.
The cessation of Musk stock sales will probably be the next big catalyst for the stock. The sales are an overhang. Institutional investors probably don’t want to add to positions, if they are inclined to, while the CEO has millions of shares to sell.
Musk has been selling for about a month after weighing into the debate on billionaire taxation. Selling stock means he has to pay taxes on capital gains. Musk also had expiring stock options to exercise. Stock options are treated like regular pay for tax purposes when they are exercised.
Write to Al Root at [email protected]
