Are they just unlucky, or is it part of a buying low strategy? The stocks that South Korean retail investors, known as Seohak Ants (overseas stock investors), buy are falling, while the ones they are selling are rising.
“Tesla sales continue.”
According to the Korea Securities Depository on October 18, Tesla’s holdings reached $12.6395 billion as of October 15, placing it at the top. This figure surpassed Nvidia’s $12.55274 billion, which had held the top spot until the previous day.
Regarding net purchases, Tesla, at $69.77 million, also ranked first among individual stocks. Meta Platforms, Facebook’s parent company, followed with $53.76 million; Microsoft came in third with $43.20 million. In October, the total transaction volume (the sum of buying and selling amounts) reached $2.14185 billion, making it the highest excluding exchange-traded products (ETPs).
However, Tesla’s stock price has been moving in the opposite direction. On September 30, it rose to $261.63, but by October 17, it had fallen 15.40% to $221.33.
The recent disappointment surrounding Tesla’s unveiled robotaxi seems to have fueled the selling pressure. On October 11 alone, the stock fell by 8.78%, closing at $217.80. In terms of market capitalization, the company lost $67 billion in just one day.
Barclays, a U.K.-based investment bank, commented on Tesla’s robotaxi announcement, stating that there was no update indicating short-term opportunities. They added that Tesla did not showcase the low-cost model scheduled for production in the first half of next year, nor did they receive any data reflecting short-term updates on FSD progress or system improvements.
Wall Street analysts have warned that the selling trend for Tesla stock is just beginning.
Garrett Nelson, a researcher at the U.S. financial information firm CFRA Research, cautioned, “Friday’s drop could be just the beginning as Wall Street reassesses.” He noted, “There is an increasing disconnect between the stock’s lofty valuation and the reality that Tesla’s earnings growth has hit a wall,” and added that intermediate-term growth drivers are unclear.
Toni Sacconaghi, a researcher at Bernstein, also noted that Tesla’s valuation is disconnected from its fundamentals. He explained that the value of Tesla’s automotive business is about $200 billion, while the remaining $600 billion depends on unproven businesses like Full Self-Driving (FSD), robotaxis, and humanoid robots.
“Selling Nvidia was the biggest mistake.”
On the other hand, Seohak Ants has been busy selling Nvidia stock this month. South Korean investors’ net selling of Nvidia amounted to $563.83 million. Regarding buying amount, Nvidia ranked second after Tesla with $637.23 million, but the selling amount ($1.201 billion) was about twice as much as the buying, leading to a net sale. Nvidia’s trading volume was the second highest among individual stocks after Tesla.
Interestingly, as Seohak Ants sold Nvidia, the stock began to rise. After dropping to $102.83 last month and threatening to breach the $100 mark, Nvidia climbed to $135.72 by the 17th of this month, nearing its all-time high of $140.76 recorded in June.
Legendary Wall Street investor Stanley Druckenmiller remarked, “Selling Nvidia was a big mistake.”
He reflected, “I’ve made so many mistakes in my investment career. One of them was I sold all my Nvidia.” However, he continued, explaining that they still see the long-term prospects of AI as bright and are investing in AI in various ways, particularly in the infrastructure necessary for AI.
Druckenmiller concluded, “I think Nvidia is a wonderful company, and if the price were to come down, we’d get involved again.”
