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.
Some people truly believe in Musk and the brand. Those people are dipshits, but if you excluded dipshits from your market predictions, you would always be wrong.
But pension funds have a responsibility to go long, and while Tesla may rise or fall on Musk’s digital bowel movements, volatility is the problem.
Even taking them into account, long term likely would never pay off. It’s valued way over what they’d be worth if they took over the entire vehicle industry, and that’s not going to happen. Sure, for gambling maybe it’s worth it to speculate on, but for a long-term investment it’s horrible.
See I don’t get I the value is based on some future that they think Tesla can get to. So what happens if it got there the stock would stay this price?
Stocks, and really anything, is worth exactly the intersection of what someone is willing to pay and what the person who has it is willing to accept. You can make valuations based on profits and growth and liabilities, but those are estimates to help professionals determine what they are willing to pay or accept. If some dolt is willing to pay more, then that’s what it is worth for that transaction.
If the stock goes up in value, some people will sell. There’s a natural balance to the curve, as the faster a stock rises, the more people will sell and this will bring the price back to earth. This is why the diamond hands strategy of Game Stop investors was so confounding. People weren’t buying for profit, they were buying to fuck over short selling hyenas. But that’s a whole nother can of worms.
The point is, if people believe it will go up, they will buy. More buyers means the price goes up, so that can have a compounding effect, and they feel good about their decision. When people think it’s gone high enough, they sell, which makes the price go down, and they feel good about their decision.
The stock market is as much paychology as it is economics. Precicting what humans will do and then doing it first is the real magic of investing. And with Muskeegee Airhead, there’s no way to predict what he will do. That’s why risk averse investors are moving away.
Diamond hands makes more sense when you think of it as something people were encouraging holders of the stock to do rather than something they were intending to do themselvee