Should I sell my Tesla shares in case Elon Musk has a cage fight?
I’ve been wondering what to do with my Tesla (NASDAQ: TSLA) shares after more headlines about Elon Musk taking on Meta‘s Mark Zuckerberg in a mixed martial arts (MMA) fight.
I’ll admit, that’s a very surreal sentence to write. But there are a couple of legitimate things to consider here, I feel, particularly as it could lead to more accusations that Musk is not fully focused on Tesla.
What’s more, this isn’t Warren Buffett taking on Bill Gates in a few rounds of bridge. There’s obviously an inherent danger involved, even more so when the younger Zuckerberg has a blue belt in Brazilian jiu-jitsu while Musk has admitted that he rarely exercises.
So, should I be slightly concerned as a Tesla shareholder?
Battle of the billionaires?
To recap, Mark Zuckerberg first raised the idea of a contest in a social media post back in June. This occurred as Meta was preparing to launch Threads, the rival microblogging site to Musk’s Twitter (now rebranded as X). Musk duly accepted the challenge.
After that initial back-and-forth, things went a bit quiet. Then on 11 August, it was reported that Musk was in talks with Italy’s government about hosting the proposed charity contest in an “epic location” in the country.
No date has been set, though, as the Tesla chief executive first needs to undergo minor shoulder surgery. This delay has prompted Zuckerberg to claim Musk “isn’t serious” about the fight.
More potential distractions
If this contest goes ahead, it could cause additional volatility in the Tesla share price. After all, some investors are still worried about Musk taking on too much. He owns and is involved in five companies already, namely Tesla, SpaceX, The Boring Company, X, and brain-implant startup Neuralink.
Additionally, he just launched a new artificial intelligence company called xAI. That’s a lot already without taking on the multi-month project of getting in shape for a mixed martial arts bout.
That said, Musk has been involved with multiple projects and companies for years. And I’m yet to see it negatively affecting the financial performance of the electric vehicle (EV) firm. Quite the opposite, in fact.
Focusing on what matters
Last year, the company recorded over $81bn in revenue, a 51% increase from 2021. From this, it earned $12.6bn in net income while generating $7.6bn in free cash flow. That was after investing in its growth initiatives.
Despite this, one potential concern for me is China, which remains critically important to Tesla’s growth. This is the world’s largest EV market, and is expected to grow from $260bn in 2023 to around $575bn by 2028.
However, according to Bank of America, July deliveries of the Tesla Model 3 and Model Y deliveries in China dropped by 31% over the previous month. That’s despite the lower prices initiated in recent months. Meanwhile, local rival BYD grew its sales by 4%.
So, competition in China is certainly heating up for Tesla. However, this isn’t enough for me to press the sell button yet. More competition was inevitable once car manufacturers started to move away from traditional engine vehicles.
Also, headlines about a cage fight won’t ultimately persuade me to sell my shares. As things stand, I’m more than satisfied with the company’s continuing growth and innovation.
The post Should I sell my Tesla shares in case Elon Musk has a cage fight? appeared first on The Motley Fool UK.
Should you invest £1,000 in Tesla right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Tesla made the list?
See the 6 stocks
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
- Should I forget Tesla and buy Rivian Automotive stock instead?
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Ben McPoland has positions in Tesla. The Motley Fool UK has recommended Meta Platforms and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
