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Cathie Wood Sells Tesla Stake: AI Bet or Sell-Off?
25 Dec
Summary
- ARK Invest sold 23,110 Tesla shares for $11.2 million.
- Tesla's Q3 revenue grew 12%, but deliveries increased only 7.4%.
- Intensifying competition and price cuts impacted Tesla's Q3 margins.
ARK Invest, led by Cathie Wood, recently sold 23,110 Tesla shares valued at approximately $11.2 million. This partial divestment, occurring after Tesla's pullback from record highs, has fueled discussions about the electric vehicle giant's current valuation and future prospects. Despite the sale, ARK Innovation ETF retains a significant stake, indicating this was likely a profit-taking maneuver rather than a fundamental shift in strategy.
Tesla continues to position itself as an AI platform, highlighting advancements in Full Self-Driving technology, robotaxis, and its Optimus humanoid robot. CEO Elon Musk emphasized these long-term drivers during the third quarter earnings call. However, challenges persist in its core automotive business, with Q3 revenue rising 12% year-over-year to $28.1 billion, while vehicle deliveries saw a more modest 7.4% increase.
Intensifying competition, especially from lower-cost Chinese manufacturers, and ongoing price reductions have pressured Tesla's profit margins, leading to a 31% year-over-year drop in adjusted earnings per share for Q3. Nevertheless, the company maintains strong free cash flow of $4 billion and a substantial cash reserve of $41 billion to support its expansion plans.
