With Tesla (NASDAQ:TSLA) shares down 37% year-to-date due to slowing EV sales, management exits, and now layoffs, a couple of notable investors are buying the dip. This has some investors asking if they should follow along or avoid catching a falling knife.
Why is Tesla’s stock falling?
The biggest reason Tesla’s stock is down so much this year is fading EV sales around the globe. In the first quarter of 2024, Tesla delivered just 387,000 vehicles, which was well below the nearly 450,000 analysts expected. In the first quarter of 2023, the company delivered 422,000 vehicles, suggesting an 8.3% year-over-year drop.
Illustrating the demand problem, Telsa announced it will cut 10% of its global workforce earlier this week. “Over the years, we have grown rapidly with multiple factories scaling around the globe,” the company said in a statement. “With this rapid growth, there has been a duplication of roles and job functions in certain areas. We believe it is extremely important to look at every aspect of the Company for cost reductions and increasing productivity. This action will prepare Tesla for our next phase of growth, as we are developing some of the most revolutionary technologies in auto, energy and artificial intelligence.”
Who is buying the dip in Tesla stock?
First, billionaire Leo KoGuan, the founder and chairman of SHI International, announced on X (formerly Twitter) overnight that he has increased his share of Tesla from 27,000,000 to 27,600,000, adding 600,000 shares. Based on the current market price KoGuan’s stake is worth $4.34 billion. This would make KoGuan the ninth-largest shareholder of Tesla, ahead of mutual fund powerhouse Fidelity Management.
When asked on the X platform if he was still holding Tesla shares, he said, “Yes, I do. Moreover, I just increased my portfolio from 27,000,000 to 27,600,000 shares of Tesla. So I added 600,000 shares.”
Another large and outspoken Tesla shareholder who has recently been adding stock on the dip is Cathie Wood of ARK Invest.
ARK now owns about 5.3 million shares of Tesla stock through its various ETFs, versus 3.8 million owned at the end of 2023.
Wood is bullish on Tesla’s position for robo-taxis, which she said will be powered by AI.
“We believe that that entire opportunity is going to generate revenues of $8 trillion to $10 trillion in 2030, half of which will go to the platforms like Tesla,” Wood said in an interview with Morningstar Tuesday. “Tesla is the biggest artificial intelligence project in the world, we believe, as it moves towards this goal of autonomous taxi networks.”
