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Many Tesla, Inc. (NASDAQ:TSLA) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Tesla
Tesla Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Technoking of Tesla, Elon Musk, sold US$3.6b worth of shares at a price of US$175 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$215. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 4.9% of Elon Musk's holding.
Tesla insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Tesla Insiders Are Selling The Stock
We have seen a bit of insider selling at Tesla, over the last three months. CFO, Corporate Controller & Chief Accounting Officer Vaibhav Taneja only netted US$44k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Does Tesla Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Tesla insiders own 14% of the company, currently worth about US$99b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.