An interesting thread popped up on the Tesla Motors Club forum this week about a stock sale from Tesla VP Jerome M. Guillen. (Full disclosure: I’m long TSLA.) The sale had been announced in an SEC filing, and some investment sites proceeded to pick it up and speculate it was a bad sign for Tesla. Such a conclusion, however, is apparently misguided and uninformed.
Before diving into that, however, here are some details on the sale: Guillen sold 1,500 TSLA shares at an average price of $264.53, which meant the transaction came to $396,795. Guillen now owns 2,662 shares, with a total value of around $708,171. So, that sale was a pretty big chunk of his holdings.
The first commenter on the forum thread noted that Guillen has made such transactions (sales) in the past, and it always causes a bit of a ruckus. Forum member “NigelM” then chimed in with what seems to be some critical information that is routinely missed in articles and discussions about these sales: “Tesla management is in a blackout period so without even without [sic] looking I’ll say it’s a 10b5 sale. Several Tesla execs receive shares as part of their remuneration package and those shares are pre-planned to be sold under rule 10b5-1.”
Forum member “Robert.Boston” supported that point further, stating, “Right. This close to an ER, Tesla is in a quiet period, meaning insiders like JB [sic] can’t elect to transact TSLA. The fact that there’s a transaction means that he had set up a standardized program. So there’s no news here….”
So, for any less experienced Tesla investors or fans who might be shaken up by news of stocks sales from key people at Tesla, I think you can see now that you really need to look at the details of the sale to understand if it means anything. Share the word.
Image by Heinrich-Böll-Stiftung (some rights reserved)