Tesla is one of the largest publically traded companies in the world and currently has a market cap of over $600 billion. The story of how this electric vehicle manufacturer reached such historic heights is an interesting one, but it’s not a story that can be told without talking about the public holdings of the company. Today, we are going to answer the question: Who actually owns Tesla stock? By the end, you should have a more thorough understanding of the company, as well as how it got to where they are today. Let’s get started.
Understanding Tesla Stock
Tesla stocks are, simply put, a small publically traded portion of the company that allows owners to take part in the growth of the company, as well as raise funds for the company at initial purchase.
As it stands, there are around 3.2 billion Tesla shares outstanding, a figure you can find by dividing the market capitalization by the share price. Since the market cap is the total value of all the company’s shares, dividing it by the current share price will give you the current number of outstanding shares. Currently, Tesla has a market cap of $690.93 billion and a share price of $221. Outstanding shares are generally a constant number, but things like stock splits and merges can cause outstanding shares to fluctuate, meaning this number is bound to change in the future.
Breaking a company into 3.2 billion pieces of ownership seems rather insane, but it’s actually relatively common in the stock market. What’s more important than the number of shares, however, is the percentage of shares owned. Owning high percentages of a company (via shares) gives the holder more say and sway in the company.
Who Exactly Owns Tesla Stock?
When it comes to Tesla, the roughly 3.2 billion shares can be split into three primary categories of ownership: institutional investors, insiders, and retail investors. Institutional investors own roughly 14%, insiders own roughly 6%, and retail investors own roughly 80%.
This split among shareholders is actually quite strange, especially in the automotive category. Let’s break down each category of the holder and understand their role in Tesla’s success (or demise).
An institutional investor is a company, holding, trust, institution, mutual fund, bank, or similar entity that purchases shares in a company. These institutional investors have historically held the most power in the stock market and boast names like Blackrock, Vanguard, Fidelity, and more. These large-scale money managers essentially manage money from groups of individuals (often wealthy ones), giving them more access to capital at a larger scale.
In the case of Tesla, institutional investors actually had a large part to play in the short squeeze that happened in 2020. A “short” is basically a bet that a company will underperform in the stock market within a certain amount of time. In 2019 and 2020, over $40 billion worth of Tesla shorts were held by large institutions, eventually making it the most shorted stock in the world based on the total value of the stock position.
Eventually, these shorts expired, and an influx of money poured in from retail investors, sending the price skyrocketing (moon?). This quick jump caused by the shorts expiring is known as a short squeeze, and the Tesla short squeeze was one of the largest in recent memory.
Insiders are the smallest ownership group by percentage, but it makes sense as they are a very small group of people. An insider is simply an executive of a company that receives some of their compensation in the form of stock options. Among these insiders is Elon Musk, the largest individual holder of Tesla stock (around 4-5%) and CEO of the company. Other insiders with large holdings include Herbert Kohler and H.E. Ahmed Saif Al Darmaki.
One of the strangest elements about Tesla is its massive retail investor following. A retail investor is an individual investor that isn’t represented by a firm and invests on their own behalf. Using a consumer-facing brokerage account like Robinhood, Ameritrade, or Merryl Edge, anyone with money and time can put their assets where they best see fit.
Tesla’s ownership boasts a retail investor ownership of nearly 80%. For reference, other automobile manufacturers have much higher ownership positions held by institutions, not individuals, including:
- GM at 80%
- Rivian at 60%
- Ford at 50%
This influx of retail investors gives Tesla a unique vantage, as they aren’t as beholden to large corporations (which has its pros and cons). These retail investors are what pushed Tesla to its ATHs (all-time highs) after the short squeeze, have created the “Tesla bro” culture surrounding the company, and have brought “investing in Tesla” to the dinner table.
Tesla doesn’t take this large-scale retail inventorship lightly. In fact, the recent announcement of the stock split even included a nod to making their stock more available to smaller-scale retail investors who aren’t playing with capital pools in the billions:
“We believe the stock split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximise stockholder value. In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the stock split will also make our common stock more accessible to our retail shareholders.”Tesla via an announcment to the SEC
A Quick Summary
As it stands, retail investors are the largest portion of shareholders in Tesla, something that the company recognizes and seems to appreciate. Institutional investors represent a much smaller portion of the overall shareholder distribution, giving institutions less sway in the sayings of the company. The smallest total percentage of shareholders are insiders or executives in the company with shares they acquired via their employment and stock options and compensation packages. Of these insiders, Elon Musk is the largest individual shareholder.
- Elon Musk is the single largest shareholder of Tesla stock (around 4.8% of total shares)
- Retail investors (individuals not associated with large firms) are the largest percentage of shareholders of Tesla
- Institutional investors hold around 14% of the total shares, with Vanguard and Blackrock being the two largest institutions