South African billionaire Elon Musk now owns less shares of electric car maker Tesla than the top 3 passive investment funds in the US, Markets Insider reports.
The combined portfolio of BlackRock, Vanguard and State Street, the funds in question, is 13.58% of Tesla shares. Of these, Vanguard is the largest investor with a 6.85% stake, while two other funds have more than 3%, the Financial Times reported.
As for Musk, he is left with about 13 percent of Tesla after selling his stake repeatedly in recent months to finance the acquisition of Twitter in late October 2022.
The most publicized of those sales came after Musk asked his tens of millions of Twitter followers in a poll whether they should sell shares in the automaker.
However, documents later provided by Musk to the US financial authorities showed that these sales were planned even before he created the corresponding survey last November.
Tesla is taking advantage of the fact that the US stock market is once again at an all-time high
Musk sold $40 billion worth of Tesla stock in less than 14 months, contributing to a spectacular collapse in the company’s market capitalization.
But Tesla shares are up 69% this year amid a widespread recovery in financial assets that hit record highs during the COVID-19 pandemic, such as bitcoin and GameStop shares.
The optimism of investors is unusual, given that in the US the reference interest rate was raised by the Fed to 5%, the threshold after which other types of assets become more profitable.
But analysts have blamed the situation on speculation that the Fed is going to ease its monetary policy to avoid a recession in the US economy as inflation has been falling for months.
There’s no doubt that the new rally in Tesla stock is good news for passive investment funds that hold portfolios similar to major stock indexes like the S&P 500.
Investors who prefer such funds prefer investments with long-term risk, hence the name “passive”, in addition to the fact that they are managed automatically, which significantly reduces their ongoing costs.
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.