Although Elon Musk’s sales were the first time he sold any Tesla stock since 2016, Kimbal Musk has been selling his own shares on a regular basis. So have many other top executives and board members at the world’s most valuable automaker.
Leaving money on the table
Many insider sales are made to diversify their holdings and don’t necessarily predict the direction of the stock. In the case of Tesla insiders, diversifying wasn’t necessarily the best strategy.
“The irony is they left hundreds of millions on the table by selling early,” said Daniel Ives, tech analyst with Wedbush Securities.
Kimbal Musk’s sales
Kimbal Musk has sold 525,00 shares on a split adjusted basis since October 2019, receiving $189 million as a result, for an average price of $360 a share. If he still owned all those shares, they now would be worth $369 million more than what he received. And he would have just more than twice as many shares as he currently holds.
Some of Kimbal Musk’s sales were made using a “Rule 10b5-1 trading plan,” an SEC rule that allows company insiders to sell shares on a pre-arranged schedule so they can’t be accused of trading on news about the company. He has also sold some shares in which the filing doesn’t mention such a plan.
Tesla shares have made up that lost ground and more since that sale, when his shares sold for an average price of $852. Now they are trading over $1,000, even with the recent slide brought on by his brother’s stock sales.
Last week’s sales by Kimbal Musk, just before his brother started selling shares, did not mention a Rule 10b5-1 trading plan.
Zachary Kirkhorn’s sales
Virtually all of Kirkhorn’s sales have been through Rule 10b5-1 plan trades, although some additional sales were performed by the company to pay the withholding taxes he owed on exercised stock options that are part of his compensation.
In most months, he’s sold between 750 shares and 1,250 shares on a split adjusted basis, which, during the the last two years, have amounted to 25,250 shares, at an average price of $503 a share, or about half of their current value. That brought him $12.7 million.
Robyn Denholm’s sales
Denholm’s filings over the last two years do not mention any trading plan. She has sold nearly 412,000 shares of Tesla on a split-adjusted basis, leaving her with the same stake of 5,000 Tesla shares that she had two years ago just before shares started their rise.
The shares that she held came from exercising stock options that cost her a fraction of their market value, generating a $200 million profit. She would have done much better hanging onto the shares she acquired and immediately sold, which would have been worth $438 million.
Source : CNN
