Tesla's stock bounced back from its recent selloff on Tuesday in a rally of electric vehicle stocks a day after Chief Executive Elon Musk disclosed he sold another $930 million worth of his company's shares.
In a sector surge that also included Rivian Automotive and Lucid Group, Tesla rose almost 3% to about $1,040, leaving its market capitalization down about $187 billion since before Musk began selling shares last week.
Rivian's stock jumped 10%, with the EV maker now up over 100% since its initial public offer last Wednesday, putting its market capitalization at $140 billion as of mid-day, overtaking Volkswagen AG by about $1 billion and making the Irvine, California company the world's third most valuable carmaker.
Lucid surged 15% after it said reservations for its cars rose to 13,000 in the third quarter and said it is confident it will produce 20,000 of its upcoming Lucid Air sedans in 2022.
Musk sold 934,091 shares after exercising options to buy 2.1 million stocks at $6.24 each on Monday, according to a company filing.
Elon Musk sells $6.9bn in Tesla shares after Twitter poll
Over the past week, Musk has sold about 7.3 million Tesla shares for $7.8 billion. Those sales fulfill almost half of his pledge on Twitter to sell 10% of his stake in Tesla.
Musk began selling shares last week after floating the idea in a Twitter poll.
With electric carmakers increasingly in demand on Wall Street, Tesla's stock has surged more than 150% in the past 12 months.
"There's still plenty of buying interest because I still think ultimately, investors are viewing this as a phase and viewing pullbacks as an opportunity," said Craig Erlam, Senior Market Economist at OANDA.
"If you ask me where the share price is going to be six months from now, 12 months from now? I'd say it's more likely to be 20% higher than 20% lower."
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