- At a time when sentiment in the stock is at its most vulnerable in months, Vaibhav Taneja opted to cash in more of his shares, bringing his 90-day total to $8 million. “Tesla bulls find themselves with their back against the wall,” admitted Wedbush Securities analyst Dan Ives.
Tesla finance chief Vaibhav Taneja converted some of his shares in the carmaker to cash, adding to the selling pressure on the beleaguered stock.
Insider sales have contributed to a string of problems at the company, which is most vulnerable after interrupting operations to prepare the global rollout of a freshened Model Y, whose deliveries account for nearly two-thirds of its business.
Due in part to a production shutdown to retool its German plant, sales there tumbled 76% last month.
Tesla published an SEC filing informing investors Taneja sold another $718,000 in shares on Thursday, bringing his total over the past 90 days to just over $8 million.
Unlike chair Robyn Denholm’s far larger stock sale this week, however, this one was conducted outside of a 10b5-1 trading plan.
In other words, rather than a broker independently determining the timepoint of a sale without the insider having any direct knowledge, Taneja actively chose to sell shares at the current market price.
The last thing investors need right now is more insiders cashing in at this sensitive juncture given sentiment is already at its lowest since last April.
“Tesla bulls find themselves with their back against the wall,” admitted Wedbush Securities analyst Dan Ives, who has a buy rating and $550 price target. “This is a gut check moment.”
Musk’s younger brother sold $27 million at the earliest possible moment
The frequency with which Tesla’s senior leadership has used the stock as their personal piggy bank remains a sore subject among a large number of retail shareholders.
There’s even an informal rule of thumb to sell if one ever sees Musk’s younger brother Kimbal, a director on the board, unloading his stock since he has a knack for timing the peak.
On February 6th, he proved it once again after liquidating $27.6 million worth of shares at an average price just shy of $368 each. Tesla stock has tumbled by nearly 30% since.
Selling sooner when the price was higher in late December wasn’t an option, since the SEC sets forth strict windows during which insiders can safely sell when not using a 10b5-1 plan. The ideal time is shortly after filing quarterly results, which in Tesla’s case was on January 29th.
Roller-coaster Tesla has given up nearly all its gains since Election Day
Tesla has now relinquished essentially all its gains from Trump’s election, when it doubled in value over the span of just six weeks, becoming more valuable than all carmakers combined.
Initially, the idea that the president of the United States owed Musk a huge favor for campaigning on his behalf was sufficient for the market to justify rocketing it from $251 to $488, an all-time record.
Many felt Trump would craft federal legislation that was friendly to Musk’s business interests, including legal certainty for autonomous vehicles, while squashing all prosecutorial cases against his companies pursued by the Biden Justice Department.
But Musk’s personal drama around everything from his support of Germany’s far-right to a paternity scandal around his alleged 13th child to his admitting he lied about his skills as a video gamer has turned many people off.
Drama around Musk’s personal and professional life pressures stock
It’s not just his private life that’s under more scrutiny. Musk has been attacked for his tone-deaf and cringeworthy performance as DOGE cost-cutter-in-chief, brandishing a chainsaw at a recent CPAC conference meant to celebrate the sacking of U.S. Civil servants.
This approach may have worked in Argentina, a country ranked 99th in the world in tackling corruption. However, most Americans view the federal government as only in need of reform rather than rotten to its core.
Musk now has among the lowest approval ratings of the Trump administration. The president has now been forced to step in, reining in his power amid fury over the entrepreneur’s brutal treatment of U.S. Military veterans, a key Republican constituency.
Wedbush’s Ives nevertheless feels the sell-off has likely run its course and placed Tesla shares on their “Best Ideas” list as a conviction buy on Thursday.
“We continue to believe the best thing that ever happened to Musk and Tesla was Trump in the White House,” he wrote. “This will create a deregulatory environment with a federal autonomous roadmap central to the Tesla golden strategic vision.”