Cathie Wood is sure that Tesla’s (NASDAQ: TSLA) rough week is just a ‘blip’ on the way to $3,000. The head of ARK Investment Management believes in and understands the EV company more than many other investors.
Tesla’s share price was volatile this week and fell about 14% after CEO Elon Musk conducted a poll on Twitter. He asked if he should sell 10% of his stake in the company, which was supported by almost 60% of voters. This had a temporary negative impact on the price, but after a few days, the price began to recover.
“Of course the momentum players turned tail as soon as the stock reacted to that news and followed it down,” Wood told Bloomberg in an interview from the Dynasty Financial Partners’ 2021 Investments Forum. “For us, we have been taking profits on the way up and receiving a lot of criticism for it, and for us this is nothing but a blip.”
Despite the sale of Tesla shares from the ARK Innovation ETF last week, Wood’s Tesla allocation still makes up almost 10% of the $21 billion fund.
Wood also commented that Musk had conducted a Twitter poll about the sale of 10% of his shares, saying that he may have felt obligated to do so. The head of the company is extremely careful about his stake in Tesla, and never used the sale of the shares to make money. “He has been on the record as saying ‘I was the first in and I’m going to be the last out,’” she said. “And yet he has an enormous tax bill related to stock options. I am sure he didn’t want to use any more of his stock as collateral for loans so I think that’s sensible.”
As a shareholder, Musk should not be under pressure, Wood said. “I don’t want him to be under pressure as a shareholder, I want him to feel he’s secure and be in good shape so he can do the job,” she said of Musk.
© 2021, Eva Fox | Tesmanian. All rights reserved.
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