Major insider stock sales, particularly those executed near highs not seen in some time, tend to unnerve investors, though they are generally pre-planned to ensure compliance with regulatory rules and guidelines and mostly not reflective of short-term dynamics or expectations.
Thanks to this common practice, planned 2025 insider sales of more than 1.1 million Tesla (NASDAQ: TSLA) shares – worth approximately $300 million at press time – became known in October 2024.
Specifically, a recent 10Q Securities and Exchange Commission (SEC) filing revealed that three Tesla bigwigs – Robyn Denholm, Kathleen Wilson-Thompson, and Elon Musk’s brother, Kimbal – intend to sell a significant amount of their TSLA stock by next summer.
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Additionally, the plans have been in place since between July 25 and August 12, 2024, in adherence to the Rule 10b5-1 trading arrangement.
This is how much Tesla insiders will make selling TSLA stock
The 10Q filing revealed that on July 25, director Robyn Denholm decided to open the possibility of selling up to 674,345 shares from options expiring in June 2025 by June 18, 2025.
Director Kimbal Musk decided to sell up to 152,088 shares by May 30 of the same year on July 31, 2024, and director Kathleen Wilson-Thompson opted on August 12, 2024, to prepare a sale of up to 300,000 by February 28.
If Tesla stock maintains its press time price of $263.07, the directors will make $177 million, $39 million, and $79 million, respectively.
The announcement is somewhat controversial as it comes at a time when Elon Musk’s compensation package – worth more than $40 billion – is still under scrutiny, despite the summer 2024 legal victory.
The matter of executives assigning compensation to themselves and their CEO is particularly pointed as the previous report indicated that, for example, Robyn Denholm held only 85,000 TSLA shares.
At current prices, the options disclosed in the 10Q filing will effectively boost Denholm’s Tesla stock net worth by at least $177 million from around $20 million to about $200 million.
Tesla stock price outlook for 2025
Additionally, the report drew attention thanks to the fact that TSLA stock has recently ended its long losing streak and entered a major rally. The surge was driven by a relatively strong third-quarter (Q3) earnings report and it ensured that, after a 20.48% 5-day rise, Tesla shares are 5.90% in the green year-to-date (YTD).
Interestingly, the director’s decision to sell the shares came shortly after TSLA’s previous major rally, which saw the stock briefly reach $263 in mid-July.
The press time momentum means that the senior insider might eventually make significantly more than the estimated $300 million from the sales as there is an expectation Tesla stock could soon reclaim $300.
The arrangement expiry dates – all within the first half of 2025 – could also either help or harm the directors’ profits.
On the one hand, should Tesla disappoint investors by failing to deliver on its ‘Robotaxi’ and humanoid robot promises, TSLA stock price at the end of next year could be significantly below where it stands at press time.
Simultaneously, should it deliver on these and other technological pledges, Elon Musk’s electric vehicle (EV) maker could rapidly reach previously unheard-of highs.
Featured image:
El editorial. in this photo the logo of tesla is displayed on a smartphone screen With declines market in the background. Digital image. Shutterstock, September 22, 2024. Date retrieved: October 29, 2024.
