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Panasonic dumps its entire $3.6 billion Tesla stake, maintains relationship is intact

Panasonic dumps its entire $3.6 billion Tesla stake, maintains relationship is intact
Jordan
Major
3 months ago
3 mins read

Panasonic sold its entire share in their important battery client Tesla (NASDAQ: TSLA), in the last fiscal year, valued at about 400 billion yen ($3.6 billion), Nikkei Asia reports. 

The move provides the Japanese firm with billions of cash to support new strategic initiatives, such as the $7.1 billion purchase of Blue Yonder, a software company based in the United States.

Nevertheless, despite unloading their stake, Panasonic will continue to supply U.S. firms with electric-vehicle batteries. As a Panasonic spokesperson confirmed on Friday, “our relationship with Tesla as a business partner will not change going forward.”

Panasonic’s share price increased 4.53% in the morning session after Nikkei reported the stock sale.

History between the firms

Panasonic invested in Tesla in 2010, shortly after its initial public offering on the Nasdaq exchange, after negotiating its first supply deal with the manufacturer in 2009. The move provided Tesla with crucial financial backing while also advancing Panasonic’s vehicle battery business.

The Japanese firm paid $21.15 per share for around 1.4 million shares. Its investment was valued at 81 billion yen, or $730 million, according to its annual securities filing for the fiscal year ending March 2020. 

Later Tesla’s stock price began to rise in the spring of 2020, hitting $900 per share at one point – nine times its worth at the end of March of that year after accounting for variables such as a stock split.

Panasonic aims to expand car battery operations

The sale contributes to Panasonic’s growing need for finance. In April, the Japanese multinational electronic giant announced a $7.1 billion acquisition of Blue Yonder, a U.S. supply chain software supplier, as the company looks to expand its car battery operations.

Panasonic had sold all of its Tesla stock by the end of March. As a result, the gain accounted for a large portion of the company’s 429.9 billion yen ($3.88 billion) in “proceeds from sale and redemption of investments” in its consolidated statements of cash flows for that fiscal year, which was up approximately 380 billion yen from the previous year.

Tesla’s ROI

Despite the 2021 correction, investors have seen a good return on investment (ROI) due to the outstanding 2020 growth. 

According to our previous research, Tesla shares returned 224.93% between June 2020 and June 2021, outperforming some of its key competitors.

The worldwide semiconductor scarcity is to blame for the fall in the stock price. However, for Tesla to maintain its outstanding return on equity investment, the firm must guarantee that elements such as deliveries remain on track. 

As per our statistics, the anticipated Cybertruck pre-orders for the 2019 model were 1.08 million as of May 25, 2021, outpacing Tesla’s previous two years of delivery, making the Cybertruck launch potentially the most anticipated event for the firm within the next year.

It would seem from all of this that Panasonic wishes to lessen its dependency and reliance on Tesla in order to raise funds to invest in growth opportunities.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.