Billionaire investor Elon Musk’s brother and director Kimbal Musk sold Tesla (TSLA) stock worth $27.6 million last week. The corporate insider of electric vehicle (EV) maker Tesla made a massive informative stock sale of roughly 75,000 common shares of Tesla. This is notably the first big “Informative Sell” transaction for TSLA stock this year, and also over the past seven months, raising concerns about the future prospects of Musk’s ambitious EV company.
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Musk’s close ties with President Donald Trump could be impacting the company’s stock price performance. This could be one of the reasons for Kimbal’s sudden decision to sell the stock, which has actually declined 13.2% so far this year. Apparently, Tesla is facing consumer backlash due to Musk’s political connections, which is expected to impact its future performance as well. Analysts at Stifel Nicolaus also lowered Tesla’s price target citing similar concerns.
Tesla is one of the leading electric automobile manufacturers in the world. Aside from EVs, Tesla’s founder and CEO Musk also has ambitious targets of manufacturing humanoid robots, called Optimus to help consumers in doing mundane tasks.
A corporate insider’s share sale usually signals caution about the company’s future potential. However, an insider might sell shares for other reasons, such as financial or personal obligations.
A Closer Look at the Insider’s Transactions
As per Form 4 filed with the SEC on February 10, Kimbal sold 75,000 TSLA shares on February 6. Shares were sold in two tranches at weighted average prices of $367.868 and $368.43 apiece.
Following the latest share sale, Kimbal still owns 1,463,220 common shares worth $513.19 million, based on the closing price on February 10.
TSLA stock currently has a Negative Insider Confidence Signal on TipRanks, mainly due to the Informative Sell transactions worth $27.6 million undertaken by Kimbal Musk.
It is important to keep an eye on the Informative trades of corporate insiders, given their knowledge of a company’s growth potential. Interestingly, TipRanks offers daily insider transactions as well as a list of top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
Is Tesla a Buy, Hold, or Sell?
Wall Street remains divided on Tesla stock owing to the many reasons stated above. On TipRanks, TSLA stock has a Hold consensus rating based on 12 Buys, 12 Holds, and 10 Sell ratings. Also, the average Tesla price target of $335.86 implies 4.2% downside potential from current levels. In the past year, Tesla stock has gained 86.4%.
