The chair of Tesla sold more than $230 million in company stock since Elon Musk’s endorsement of Donald Trump alienated car buyers and dragged profits lower
Amidst a period of significant turbulence for Tesla, marked by boycotts, plummeting profits, and a sharp decline in stock value following Elon Musk’s endorsement of Donald Trump, Tesla’s chair, Robyn Denholm, has sold over $230 million worth of company stock.
According to filings reviewed by The Associated Press, a substantial portion of Denholm’s cash windfall, exceeding half of the total, occurred within the first four months of the current year, during which Tesla’s stock price plummeted by approximately one-third. In total, Denholm liquidated hundreds of thousands of shares, representing more than half of her holdings, as dictated by a pre-arranged selling plan filed with regulatory bodies. This plan coincided with Musk’s increasing embrace of right-wing political stances.
The timing of Denholm’s stock sales is particularly noteworthy, as the selling plan was filed on July 25, the same day that Musk publicly endorsed Trump for president. Furthermore, Denholm’s profits were significantly amplified by the fact that many of the sold shares were acquired through stock options granted to her by Tesla years prior. These options, given the recent stock prices, allowed her to purchase shares at a substantial discount. Data from research provider FactSet reveals that nearly a million shares obtained through these options were bought for $25 each, a fraction of the market price that prevailed for much of the preceding nine months.
The Associated Press reached out to both Tesla and Denholm for comment but did not receive an immediate response. However, a statement attributed to Denholm and published in The New York Times, which initially reported on the insider sales, asserted that the share value of Tesla directors’ holdings had increased significantly due to the company’s stock surge, resulting in “outsized returns” for all shareholders.
The rationale behind Denholm’s decision to liquidate a significant portion of her Tesla stake remains unclear. Pre-determined selling schedules, like the one Denholm employed, are typically utilized by corporate executives and directors to assure investors that their stock sales are not based on non-public, insider information (which is illegal) or necessarily indicative of a pessimistic outlook on the company’s future.
Denholm is not the only Tesla insider who has engaged in stock sales during this period. FactSet data indicates that Tesla’s chief financial officer and other directors have collectively sold $189 million worth of stock within the same nine-month timeframe.
Tesla’s stock experienced a surge following Trump’s election in November, fueled by investor optimism that Musk’s close relationship with the president-elect would translate to reduced regulatory oversight and increased profitability for the company.
However, Musk’s subsequent involvement in government cost-cutting initiatives for the Trump administration, coupled with his public support for far-right political figures in Europe, triggered a backlash among car buyers, leading to a decline in Tesla’s sales and a corresponding drop in its stock price. Tesla’s recent earnings report revealed a dramatic 71% plunge in profits for the first three months of the year.
Conversely, Tesla’s stock experienced a resurgence after Musk announced his intention to scale back his involvement in Washington and dedicate more time to the electric vehicle manufacturer. On Wednesday, Tesla’s stock closed at $347 per share, representing a 4% increase for the day and a more than 50% rise since its April low. 1
