Tesla’s chairperson has sold over $230 million worth of company stock, amidst a backlash that followed Elon Musk’s endorsement of Donald Trump. This support led to protests and boycotts against Tesla, impacting its profits and stock values.
According to a filing reviewed by the Associated Press, more than half of Robindenholm’s cash flow stemmed from stock sales during the year’s initial four months, coinciding with a 33% drop in Tesla’s stock. She divested hundreds of thousands of shares, which accounted for more than half of her total holdings, based on pre-set sales plans filed when Musk began to embrace right-wing politics.
Denholm outlined this sales plan on July 25, the same day Musk expressed his backing for Trump in the presidential race.
This situation was significant for Denholm, as the shares sold were primarily acquired through options that were granted to her. Remarkably, she had nearly one million shares purchased for $25 each, which were worth less than a tenth of the market price for most of the past nine months.
The AP reached out to both Tesla and Denholm, but there was no immediate response.
In a statement to the New York Times, which had previously covered insider sales, Denholm pointed out that the stock value of shares held by Tesla’s directors had soared. She mentioned this led to “large returns” for shareholders.
The reasons behind Denholm’s decision to sell such a significant portion of her shares remain unclear.
Using a pre-determined sales schedule is intended to reassure investors that these transactions aren’t motivated by insider knowledge or negative sentiments toward the company.
Denholm isn’t the only insider selling shares. Data from FactSet reveals that the Chief Financial Officer and other directors collectively sold $189 million in shares over the same nine-month period.
After Trump’s election in November, Tesla’s stock initially surged, fueled by hopes that Musk’s close relationship with him would bring regulatory advantages. However, Musk’s role as a government cost-cutting chief for Trump, along with his support for far-right politicians in Europe, has incited a backlash from consumers, resulting in declining sales and stocks.
Last month, Tesla announced a staggering 71% drop in profits for the first quarter of the year.
Recently, the stock has rebounded somewhat after Musk indicated he would withdraw from government responsibilities to devote more time to the electric vehicle company. As of Wednesday, Tesla’s stock closed at $347 per share, reflecting a 4% increase for the day and a recovery of over 50% from its low in April.
