Summary
Dutch pension fund Stichting Pensioenfonds ABP sold its $585 million Tesla stake over concerns about Elon Musk’s “controversial and exceptionally high” pay package and unspecified labor conditions.
ABP previously voted against Musk’s performance-based compensation, which has faced shareholder lawsuits and judicial scrutiny.
A Delaware judge recently invalidated the pay package, citing insufficient shareholder approval.
While Tesla’s Model Y remains popular in the Netherlands, European sales fell 15% in 2024.
ABP stated the divestment was not politically motivated despite Musk’s ties to the Trump administration.
Institutional investors like pension funds selling a stock is kind of a big deal though, as a) there are a lot of them for a stock as “big” as Tesla, b) they are far less risk averse then individual investors, and c) the managers of these funds tend to pay attention to what other funds with similar holdings are doing. If one this big sells, others will wonder if they should get out now as well.
This could, in theory, be the start of a mass selloff of Tesla stock by institutional investors wanting to get out before the bubble bursts and they stop seeing gains from Tesla stock.