Tesla (TSLA) shares have never behaved the way most stocks do.
Take its most recent earnings release, for example.
The EV maker reported first-quarter revenue of $19.34 billion with earnings per share of 27 cents. Analysts were expecting the company to report revenue of $21.3 billion with earnings of 44 cents per share.
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If most companies missed revenue estimates by $2 billion and earnings estimates by 34%, their stocks would feel the pain the next day and the following one, until something changed investor sentiment.
But Tesla isn’t like most companies. As of Wednesday afternoon, Tesla shares had jumped 47% since opening trading on April 23, the day after its earnings release.
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Despite the rough quarter, Tesla investors got the news they’d been waiting all year for: Elon Musk is leaving his post in Washington, D.C., to spend more time at his day job in Austin running Tesla.
While this announcement, plus confirmation that Tesla’s robotaxi program is indeed starting in Austin this summer, were enough to convince Tesla investors to bid up shares, apparently it hasn’t been enough to convince at least one insider to hold onto her shares.
Tesla board chair makes big stock sale
Robyn Denholm was appointed as Tesla’s board chair in 218 after the Securities and Exchange Commission ruled that Elon Musk must step down due to conflicts of interest.
Since then, Denholm has sold more than $530 million shares, far more than peers in her position have made during that period, according to a New York Times investigation.
The Times piece opens with an anecdote about CEO Elon Musk telling his employees to hold onto their stock when shares were still in the midst of their freefall in March.
Denholm hasn’t heeded his advice.
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In just the last six months, she has sold $198 million in Tesla shares. These sales were executed under a 10b5-1 agreement that allows insiders from publicly traded companies to sell their shares.
This is needed to quell the appearance of insider trading based on nonpublic information.
Denholm’s sales have been timed well, often coinciding with public news that has sent the stock soaring, according to the Times report.
”To dump her stock, it doesn’t send a message that this is a board chair who is invested in the future of the company,” New York City Comptroller Brad Lander, who oversees the city’s five public pension funds, told the Times. The New York City pension fund held about $817 million in Tesla shares in March.
However, a spokesperson for Denholm told the Times that there is nothing untoward about her sales, calling them “completely aligned with shareholder interests.”
Denholm has sold more than 1.4 million Tesla shares, leaving her without about 85,000 of them and roughly 49,000 stock options, according to the report.
Elon Musk has work to do at Tesla
Despite investors’ seemingly euphoric sentiment, Tesla needs to overcome fundamental issues to achieve its goals.
The company was forced to slash prices last year to work through a backlog of inventory.
Tesla reported a 20% year-over-year drop in automotive revenue to just under $14 billion, as global deliveries fell 13%.
At the start of April, Tesla announced that it delivered 336,691 new vehicles in the first quarter. This was a 32% decline from the record 495,570 it reported in the previous quarter, missing analysts’ downwardly revised estimates of 373,000.
Before its recent rally, Tesla shares dropped more than 45% over 18 weeks.
Tesla shares were up more than 3.5% to $345.89 in afternoon trading at last check Wednesday.
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