stock has more than doubled this year while the broader market remains hampered by the coronavirus pandemic. Kimbal Musk, a director of the electric-car company and brother of CEO Elon Musk, has sold stock for the first time this year.
Tesla (ticker: TSLA) has overcome bearish views earlier this year. Shares have soared since the company planned to reopen its Fremont, Calif., plant and then defied lockdown orders to restart.
On Feb. 20, Kimbal Musk adopted a Rule 10b5-1 trading plan. Such devices are used by company insiders to eliminate the potential bias one may have from the knowledge of material nonpublic information. The insider sets parameters, such as price and volume, and the transactions are automatically executed when they are met.
On June 1, Kimbal Musk’s trading plan acquired 4,075 Tesla shares through stock options for a total of $1.51 million, or an exercise price of $370.83 each. His plan also sold 7,275 Tesla shares for $6.51 million, or $895 each. Kimbal Musk continues to own 130,848 Tesla shares and options for at least 45,925 additional shares, according to a form he filed with the Securities and Exchange Commission.
Tesla didn’t respond to a request to make Kimbal Musk available for comment.
Last year, Kimbal Musk sold 64,285 Tesla shares, also through planned transactions, for a total of $22.5 million, a per-share average of $350.06.
Only a few months ago, on March 18, Tesla stock hit a 2020 intraday low of $350.51, which is below the exercise price of Kimbal Musk’s options. At that market price, it was cheaper to buy the stock on the open market than by using the options. Tesla stock is far outperforming the broader market as measured by the
S&P 500 index,
which is down 1% year to date through Friday’s close.
Kimbal Musk also serves on the board of another company headed by his brother Elon: SpaceX, a rocket and spacecraft firm. SpaceX recently docked its Dragon spaceship with the International Space Station. Observers think SpaceX’s successes also benefit Tesla.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at firstname.lastname@example.org and follow @BarronsEdLin.