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Is Tesla’s stock ready to drop? Major hedge fund abandons shares in Elon Musk’s electric car company for struggling Boeing – just after entrepreneur became 4th richest man in the world with a fortune of $ 85 billion
- Coatue Management, an $ 11.4 billion investment firm, has sold 42% of its Tesla shares
- Coatue specializes in hedge funds trading technology stocks and technology investments
- His latest filing, Q2, shows the sale of 224,893 shares in Elon Musk’s company
- At the same time, Coatue bought $ 504 million in Boeing stock
- Analysts say move could indicate Tesla is in trouble
- In May, Musk himself tweeted: ‘Tesla share price is too high IMO’
An influential New York hedge fund with $ 11.4 billion under management ditched a large chunk of its shares in Tesla, instead buying $ 504 million in Boeing stock.
Coatue Management, founded in 1999 by French financier Philippe Laffont, announced the decision in its second quarter filings.
The company, which includes hedge funds that trade tech stocks and vehicles that invest in private tech companies and startups, sold 224,893 shares of Tesla, or 42 percent of its stake.
He bought $ 504 million in Boeing stock. The movement can, at first, surprise.
Tesla’s shares have seen a prolonged rise in the US stock market, as the company has seen its price rise 760% since this time last year.
Even the closures of its factories linked to coronaviruses could not stop the rally.
Elon Musk’s company has seen its share price jump 760% in the past 12 months
Tesla’s success saw Musk’s wealth rise to $ 85 billion – he is now the 5th richest man in the world
French financier Philippe Laffont’s fund has sold 42% of its Tesla shares
The stock price surge saw Tesla founder and largest shareholder Elon Musk increase his wealth by around $ 7 billion, making him the fifth richest man in the world, according to Forbes, with a fortune of $ 85 billion.
Boeing, on the other hand, has seen its value plummet, thanks both to the 737 Max crisis and the pandemic that has cut off travel.
At the end of the first quarter, Boeing’s value was more than 70% lower than last year around this time.
Analysts said Coatue’s decision could indicate Tesla’s value has peaked.
In May, even Musk himself said the stocks were overvalued.
Ryan Brinkman, head of US automotive research at JP Morgan, said on July 23 that Tesla shares were “very overvalued.”
He continued: “ While the technology and execution risk appear to be significantly lower than previously feared, expanding into higher volume segments with lower prices seems risky compared to demand, execution and competition. ”
On May 1, Elon Musk tweeted that the stock price was ‘too high’, shocking investors
Tesla entering China could potentially cause problems, as diplomacy between the world’s first and second largest economies heats up and President Donald Trump offers tax breaks to U.S. companies pulling out of the Asian powerhouse.
Boeing, however, was viewed as a neutral outlook.
“ While we expect Boeing to emerge from the 737 MAX crisis and start generating cash in 2021, the severity of the impact of COVID-19 on aircraft demand is unclear and we expect more confidence in the way forward, ” a JP Morgan analyst said on July 30, quoted in Newsweek.
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