NEW YORK – The chair of Tesla sold more than $230 million of company stock since Elon Musk’s endorsement of Donald Trump triggered boycotts and protests against his cars, sending its profits and stock price plunging.
More than half of Robyn Denholm’s cash haul came from sales in the first four months this year as Tesla stock fell by one-third, according to filings reviewed by The Associated Press. In total, she unloaded hundreds of thousands of shares — more than half her holdings as dictated by a pre-arranged selling plan filed with regulators as Musk began embracing right-wing politics.
Denholm filed that plan on July 25, the day Musk endorsed Trump for president.
Denholm’s profits were likely outsized, too. That is because many of the shares she sold had been acquired through so-called options granted to her by Tesla years earlier that, given recent stock prices, allowed her to buy at a deep discount, according to data from research provider FactSet. Nearly a million shares acquired through options were bought for $25, less than a tenth of the market price for much of the last nine months.
The AP reached out to both Tesla and Denholm but did not receive an immediate reply.
A Denholm statement to The New York Times, which earlier reported on the insider sales, said that the share value of holdings by Tesla directors has jumped because the stock itself has soared, creating “outsized returns” for all shareholders.
It’s not clear why Denholm decided to cash out so much of her stake.
Pre-determined selling schedules are used by executives and directors as a way of telling investors that their selling isn’t based on insider information, which is illegal, or necessarily a sign that they have turned pessimistic about a company.
Denholm isn’t the only Tesla insider who has been selling. The chief financial officer and other directors have unloaded $189 million in stock in the same nine-month period, according to FactSet data.
Tesla stock soared after Trump was elected in November on hopes that the president-elect’s close relations with Musk would translate to less regulatory scrutiny and bigger profits.
But Musk’s role as the government cost-cutting chief for Trump and his comments supporting extreme right-wing politicians in Europe have triggered a backlash among car buyers, and sales have sunk along with its stock.
Tesla reported last month that profits in the first three months of the year plunged 71%.
The stock soared again after Musk, the company’s chief executive and biggest shareholder, said he would be stepping back from his Washington work to spend more time at the electric automaker.
Tesla closed at $347 a share Wednesday, up 4% for the day and more than 50% since its April low.
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