Monster insider trading alert for Tesla (TSLA) stock

Though it might have spent most of 2024 in the red, pioneering EV maker Tesla (NASDAQ: TSLA) is having a very promising fourth quarter thus far. 

Whereas Tesla stock was plagued by supply chain issues, increasing competition, and negative reactions to the company’s Robotaxi Day event in the preceding months, October and November have been dominated by good news. 

The automaker’s Q3 2024 earnings report was an unexpected success — and Musk’s expected influence on the upcoming Trump administration is seen as a strong tailwind. However, the business isn’t out of the woods yet — although Wall Street analysts have turned bullish, Musk has a history of overpromising and underdelivering. 

What’s more, both institutional investors and several insiders have been offloading TSLA shares, executing large transactions soon after prices become favorable. While not conclusive, it is a worrying sign for long-term prospects that key players are jumping at the first opportunity to lock in profits.

At press time, Tesla shares were trading at $345.70, after rallying by 7.73% on the monthly chart to bring year-to-date (YTD) returns up to 38.78%. Now, yet another member of the carmaker’s board of directors has sold off a significant amount of shares, as revealed by a November 19 Form 4 filing.

Chairman of the board offloads $33.5 million in Tesla stock

On November 15, Robyn Denholm, Tesla’s chairman of the board, executed 11 transactions, all of which were TSLA stock sales. In total, she dumped 112,390 Tesla shares — at prices ranging from $310.05 to $320.03 apiece.

Her stake remains unchanged — the same filing reveals that Denholm exercised options to acquire exactly 112,390 Tesla stocks at a price of $24.73 per unit. This amounts to a $2,779,404 expense — her sales were worth approximately $35.3 million, leaving the director with a tidy $32.5 million profit.

The transactions were made pursuant to a 10b5-1 plan adopted on July 25, which could see Denholm sell as many as 674,345 shares by June 18, 2025. Similar strategies were put in place by director Kimbal Musk and board member Kathleen Wilson-Thompson.

Since the trades were prearranged, they do not constitute a true bearish signal — it is, however, telling that company insiders seem to unanimously consider current prices a good place to take profits.

While there is a chance that TSLA stock will pull back in the short term, Musk’s close relationship with Trump, along with the President-elect’s plans to ease self-driving rules will more than likely buoy share prices going forward.