Limited public float due to insider ownership concentration will amplify price volatility as passive funds compete for available shares during the rebalance

Sources note that Elon Musk and other insiders control a significant portion of the company's equity, leaving a relatively small public float available for open-market trading. This concentration means that when large institutional buyers such as index funds must acquire shares, they are competing for a limited pool of freely tradeable stock, which can produce outsized price swings relative to the actual dollar volume involved.

When insider ownership compresses the available float, even modest increases in institutional demand can create disproportionate price moves, making the stock structurally more volatile than its market cap alone would suggest. Investors holding or shorting thinly floated names must account for the fact that liquidity can evaporate quickly in both directions, amplifying both gains and drawdowns beyond what fundamentals would ordinarily justify.