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Tesla Stock Gains As Cathie Wood Dumps $270 Million in Shares Ahead of Q3 Deliveries

Cathie Wood's Ark Investment Management dumped 340,000 Tesla shares during Tuesday's tech sector selloff.

Tesla  (TSLA) - Get Tesla Inc Report edged higher Wednesday after long-time supporter Cathie Wood dumped around $270 million shares worth of the clean-energy carmaker amid yesterday's tech-sector selloff.

Wood's Ark Investment Management's most recent trading update shows that three of her funds, including the $21.4 billion Ark Innovation ETF  (ARKK) - Get ARK Innovation ETF Report, sold 340,000 Tesla shares Tuesday as the popular exchange traded fund slumped 4.2% to extend its year-to-date decline to around 10%, compared to a 16% gain for the S&P 500 benchmark.

Broader outflows from Wood's stable of funds are now topping $660 million, Bloomberg reported Wednesday.

Short interest in Tesla, meanwhile, remains elevated ahead of its third quarter delivery figures, potentially due Friday, and its October 20 earnings update.

S3 Partners, which calculates the volume of bets against the market's most-active stocks, pegs short interest in Tesla at around $20.45 billion, or 3.4% of the outstanding float.

Founder and CEO Elon Musk said last month that Tesla is "operating under extreme supply chain limitations regarding certain 'standard' automotive chips", and told investors in July that it could impact production rates over the second half of the year.

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Tesla shares were marked 0.75% higher in early trading Wednesday to change hands at $783.30 each. 

Musk said in an email over the weekend that this will be the company's “most intense delivery week ever," Electrek reported earlier this week, adding that he thanks workers for the “hardcore delivery push.”

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Credit Suisse analyst Dan Levy expects third-quarter deliveries to range between 225,000 and 230,000 while Piper Sandler analyst Alexander Potter, who carries an $1,800 price target on the stock, said Tuesday that he thinks this quarter will be Tesla's "strongest ever", and forecasts deliveries of around 894,000 vehicles for the full 2021 year.

Earlier this month, the China Passenger Car Association (CPCA) said Tesla sold 44,264 China-made cars in August, with 31,379 of those destined for export to international markets. 

China-based sales, CPCA said, totaled 12,885, up 49.5% from the previous month, even as overall sales in the world's biggest car market fell 15% from the same period last year.

China is a hugely important market for Tesla, but its facing deeper scrutiny from Beijing over its data and storage policies and broader brand erosion following the virtual June recall of recall of 285,000 cars -- nearly all of the group's China-based deliveries over the past five years -- linked to an autopilot software glitch.