On Monday, Tesla-focused investment firm ARK Invest picked up over $20 million worth of Tesla shares. The move came after the stock saw its biggest drop since 2020.
Stock Falls Over 15%
Tesla shares (NASDAQ: TSLA) fell more than 15% on Monday. Investors are concerned about CEO Elon Musk’s role in the Department of Government Efficiency (DOGE), which has raised doubts about his focus on Tesla.
Another issue is Q1 deliveries. The numbers will give a clearer picture of where Tesla is headed this year.
Monday’s drop was the largest since late 2020, when the stock fell over 21%.
ARK Sees Buying Opportunity
Despite the sell-off, ARK took advantage of the lower price. The firm believes Tesla’s long-term value will grow with Robotaxi, AI, and Optimus.
ARK’s flagship ARKK Innovation ETF added 68,164 Tesla shares, bringing its total Tesla holdings to over $531 million. Tesla now makes up 10% of the ETF.
ARK also bought 11,154 shares for its ARKQ Autonomous Technology & Robotics ETF.
Tesla’s 2025 Struggles
Tesla’s stock has dropped more than 38% this year. Some of this decline is linked to political concerns, as Tesla’s stock surged after Donald Trump won the 2024 election.
On Monday, the stock bounced back nearly 5% by early afternoon. Some analysts believe Musk needs to refocus on Tesla.
Wedbush analyst Dan Ives said in a note:
“This is a gut check moment for the Tesla bulls (including ourselves) after this massive sell-off in Tesla shares with fears mounting/accelerating. The bears own the Tesla narrative in the near-term as lackluster sales numbers from Europe, China, and the US in January/February along with Musk protests/brand worries have created many concerns.”
Ives also addressed worries about Musk’s involvement with DOGE and his connection to Trump:
“While the DOGE/Trump Musk iron clad partnership has created major brand worries for Tesla…..we estimate less than 5% of Tesla sales globally are at risk from these issues despite the global draconian narrative for Musk. Importantly, we expect Musk will better balance his time between DOGE and Tesla/SpaceX over the course of 2025 and some of these distraction issues will fade.”
Tesla’s performance in the next few months will be key in shaping investor sentiment.
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