Tesla stock has extended its recent selloff, pushing the electric-car maker's market value below US$1 trillion as investors reacted to CEO Elon Musk's recent share sales of a combined US$6.9 billion.
Tesla's stock dropped 4.2 percent to about US$989, leaving the company's market capitalisation down about $230 billion since before Musk began selling shares last week.
The latest stock decline follows a dispute on Twitter between Musk, the world's richest person, and Bernie Sanders after the US senator demanded that the wealthy pay their "fair share" of taxes.
"We must demand that the extremely wealthy pay their fair share. Period," Sanders wrote on Twitter.
Taking a jibe at the 80-year-old senator, Musk responded by saying "I keep forgetting that you're still alive."
Sanders' tweet comes amid the backdrop of Washington's efforts to hike taxes for the super-wealthy.
US Senate Democrats have unveiled a proposal to tax billionaires' stocks and other tradeable assets to help finance President Joe Biden's social spending agenda and close a loophole that has allowed them to defer capital gains taxes indefinitely.
At the current stock price, it would be the first time Tesla's market value has ended a session below US$1 trillion since it first breached that level late last month.
"Tesla shares have been sinking post the sale based on a Twitter poll last week. And Musk's tweet deriding a senior politician may add pressure on the stock in the coming weeks," said Kunal Sawhney, CEO of equity research firm Kalkine Group.
"By offloading shares worth billions of dollars, Elon Musk is likely to accrue a tax bill of around US$15 billion."
Musk sold 6.36 million Tesla shares last week after floating the idea in a Twitter poll. He would need to offload about 10 million more to fulfill his pledge to sell 10 percent of his holdings in the electric-vehicle maker.
Fueled by thirst on Wall Street for electric vehicle makers, Tesla's stock has surged more than 140 percent in the past 12 months. The recent selloff has the stock at its lowest level since late October.
Rivian Automotive also jumped 12 percent, with the Amazon.com-backed EV maker now up about 90 percent since its initial public offering last week.
Reflecting retail investors' enthusiasm, Tesla and Rivian were the most-traded stocks on Fidelity's online brokerage, with more than two buy orders for every sell order.
CHIP SUPPLY CONSTRAINTS
Musk at the weekend asked a Twitter user not to "read too much into" Pepsi CEO Ramon Laguarta's comments about expecting its first delivery of Tesla Semi trucks in the fourth quarter.
"As mentioned publicly, Tesla is constrained by chip supply short-term and cell supply long-term," Musk tweeted.
"Not possible to produce additional vehicles in volume until both constraints are addressed."
Tesla has weathered the pandemic and the global supply-chain crisis better than rivals, posting record revenue for the fifth consecutive quarter.
Meanwhile, investor Michael Burry of "The Big Short" fame took aim at Musk again, tweeting, "Elon Musk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking Bernie Sanders whether he should sell more stock. He doesn't need cash. He just wants to sell Tesla shares."
REUTERS
