Tesla's "Political Aftermath": Profit Plummets, Stock Price Fluctuates, Executives Cashing Out Madly
Tesla's chairwoman Robyn Denholm recently sold over $230 million worth of company stock due to a boycott triggered by Musk's public support for Trump. As Tesla's stock price fell by one-third in the first four months, Denholm's cash-out transactions mostly occurred during this period. Her stock sale plan was submitted on the same day Musk expressed support for Trump, and most of the shares came from options exercised years ago, with exercise prices significantly lower than the market price. Analysts point out that Denholm's motivation for the reduction in holdings remains unclear
According to the Zhitong Finance APP, after Elon Musk publicly supported Trump, triggering a wave of boycotts that led to a decline in both the performance and stock price of the electric vehicle manufacturer, Tesla (TSLA.US) board chair Robyn Denholm recently sold over $230 million worth of company stock.
Regulatory documents show that as Tesla's stock price fell by one-third in the first four months of this year, more than half of Denholm's cash-out transactions occurred during this period. According to a pre-established stock sale plan, this female executive has sold hundreds of thousands of shares, reducing her holdings by more than half of her total shares. Notably, the timing of this stock sale plan submission coincided with Musk's public embrace of right-wing political positions.
Documents indicate that Denholm's stock sale plan was submitted on July 25—on the same day Musk expressed support for Trump's presidential campaign.
Research firm FactSet data shows that Denholm's cash-out could be quite profitable. This is because most of the shares she sold came from options she obtained years ago, which allowed her to purchase shares at a very low discount based on recent stock prices. Among these, nearly one million shares had an exercise price of only $25, which is over 90% lower than the market price during most periods in the past nine months.
Neither Tesla nor Denholm herself responded immediately to requests for comment.
Previous reports indicated that when Tesla insiders sold stock, Denholm stated that due to the surge in the company's stock price, all directors had received "excess returns" on their holdings, which is a common phenomenon.
Analysts point out that corporate executives typically use pre-set stock sale plans to indicate to investors that their cash-out actions do not involve insider trading (which is illegal) and do not necessarily reflect a pessimistic outlook on the company's prospects. However, the specific motivation behind Denholm's large-scale cash-out remains unclear.
FactSet data shows that Denholm is not the only Tesla executive to reduce holdings recently. Over the past nine months, the company's chief financial officer and other directors have collectively sold $189 million worth of stock.
After Trump's victory in November last year, Tesla's stock price surged due to market expectations that its close relationship with Musk would lead to regulatory easing. However, as Musk took on the role of cost-cutting advisor to the Trump administration and publicly supported far-right European politicians, consumer boycott sentiments grew, leading to a sharp decline in the company's sales and stock price.
Tesla's financial report last month showed that net profit in the first quarter of this year plummeted by 71% year-on-year. However, after Musk announced plans to reduce Washington affairs and focus on company operations, the stock price rebounded. As of Wednesday's close, Tesla was priced at $347, with a single-day increase of 4%, recovering over 50% from its April low
