What happened
Shares of electric-car maker Tesla (TSLA +2.96%) fell on Friday, declining as much as 3.4%. As of 11:10 a.m. EST, the stock was down 2.5%. The stock's pullback comes even as the overall market is having a good day. As of this writing, the S&P 500 is up almost half a percent, and the Nasdaq Composite is up 0.6%.
The growth stock's decline on Friday is likely due to the news that major Tesla shareholder and CEO Elon Musk has continued selling shares.
Image source: Getty Images.
So what
New SEC filings revealed that Musk's trust unloaded nearly 640,000 shares on Thursday, valued at close to $700 million. This is on top of about $5 billion of sales already this week.
Of course, it's no surprise to see Musk selling. Over the weekend, the CEO polled Twitter users about whether he should dispose of 10% of his stake in the company so he doesn't look as if he's trying to avoid paying taxes by hoarding unrealized gains. With more than half of the respondents voting yes, Musk has started executing this plan.
It's possible that the stock's pullback today could be partially driven by even more selling by the CEO. Perhaps we'll find out if that's the case in a future SEC filing.
Now what
Investors should look for Musk to continue selling shares. He'll need to sell around $20 billion worth of Tesla stock to complete the expected sale of his 10% stake.
In the meantime, investors should take comfort in the fact that Musk plans to maintain 90% of his massive stake in the electric-car and green energy company, or over 167 million shares. At least that's the takeaway from reading between the lines regarding his Twitter poll over the weekend.
