WionDrive News Desk 
Several institutional shareholders of Tesla are divesting, convinced that the electric carmaker’s era of rapid growth is waning. The company’s stock has plummeted nearly 30% this year and over 50% since its peak in 2021, erasing approximately $600 billion in market value. CEO Elon Musk has grappled with intense competition and declining sales, with first-quarter results falling short of analyst predictions. Despite Musk’s assurance of new, more affordable models slated for 2025, skepticism persists.
John Belton, a portfolio manager at Gabelli Funds, remarked, “It started to feel like the fundamentals were becoming detached from reality,” explaining their decision to sell their entire stake acquired in early 2022. Tesla’s stock surge of nearly 14-fold in the past five years has conditioned investors to endure challenges and accept valuations akin to tech companies rather than traditional automakers. However, even staunch supporters now question the prospects of continued expansion and perceive Tesla’s shares as excessively risky.
Morningstar data reveals that out of 18 mutual funds holding Tesla since 2019, 10 reduced their positions last quarter, with four cutting stakes by 15% or more, while only five increased holdings. Yet, Wall Street hasn’t entirely lost faith, with 19 analysts maintaining either a “buy” or “strong buy” rating on Tesla, and the average price target slightly above the current closing price.
Ross Gerber, of Gerber Kawasaki Wealth & Investment Management, who bought 500,000 shares over a decade ago, has been steadily selling this year. “I think the story is over,” Gerber stated, reducing his position to around 300,000 shares. He criticizes Tesla’s public relations and perceives Musk’s personal pursuits as diverting attention from shareholder interests. Gerber values Tesla at $100 per share, anticipating a 40% decrease in value as long as Musk remains in control. He plans to donate part of his remaining stock to charity or employ options strategies to mitigate tax consequences.
