Panasonic has sold its entire interest in Tesla, the electric vehicle manufacturer, for $3.6 billion. As of March 2020, the Japanese electronics giant, which also owns a battery facility alongside Tesla, had $730 million in Tesla stock. According to a Panasonic filing, the company had reduced this amount to zero by March 2021. Since the beginning of the year, Tesla’s stock price has climbed five times.
The sale comes as the company, which makes everything from bicycles to hair dryers, looks to minimise its reliance on Tesla and raise cash for investments.
Elon Musk’s Tesla dominates the Japanese company’s battery industry, but the two companies have had a contentious relationship at times, with officials publicly going at each other.
Panasonic paid $30 million for 1.4 million Tesla shares at $21.15 each in 2010. At the end of March 2020, that stake was valued $730 million. Since then, the stock has nearly sevenfold in value, closing Thursday at $679.82 per share, up 3.5 percent.
“The impact of crypto assets may have driven Tesla’s share price over its fundamental value, making now an opportune time to sell,” said Ace Research Institute analyst Hideki Yasuda.
“The sale was part of a review of Panasonic’s cross-shareholdings policy in accordance with corporate governance code guidelines and won’t impact upon the company’s relationship or partnership with Tesla,” spokeswoman Yayoi Watanabe said.
She added that the Japanese electronics giant had informed Tesla about the sale. “Proceeds will be used for investing in future growth,” she said.
Musk announced in February that his company had purchased bitcoin and would accept payment in the digital currency, a decision he later reversed, and his tweets on Twitter have caused price swings in digital assets.
What are Panasonic’s goals after Selling Tesla Shares?
The Japanese company had launched a two-year ambition to develop additional batteries for Tesla under its new President and Chief Executive Officer Yuki Kusumi. It intends to invest billions of dollars in areas that will improve the efficiency of the company’s operations.
“Better efficiency in operations such as manufacturing will increase Panasonic’s ability to generate cash, in turn freeing up hundreds of billions of yen to direct toward new initiatives, including mergers and acquisitions,” Kusumi, had told the global news platform.
In order to streamline its operations, Panasonic had bought Blue Yonder in early 2021. “With the Arizona-based company’s software and its own sensor technologies, Panasonic can analyse site operations for inefficiencies, such as when workers are being left idle between tasks,” Kusumi added.
Author: Moses Echodu
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