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You’re here (NASDAQ:TSLA) has been trading quite well lately. Since shares jumped about 10% on July 21 after the earnings release, TSLA shares have been acting positively. Today, Tesla gets another boost from an insider buy.
Many investors would probably have preferred an insider buy from CEO Elon Musk, but today’s buy comes from Kimbal Musk instead. Brother of Elon Musk, Kimbal has been a member of Tesla’s board of directors since 2004. He also sits on the board of SpaceX and was a member of the board of directors of Chipotle Mexican Grill (NYSE:GCM) from 2014 to 2019.
As for buying, Kimbal Musk bought a significant amount of TSLA stock on Monday. Then on Wednesday evening, the executive files a Form 4 with the United States Securities and Exchange Commission (SEC). Apparently he bought another 25,000 shares.
Kimbal Musk’s cost base on the latest tranche was $74.17 per share, or about $1.85 million in total. Today, he owns 536,240 shares of Tesla worth about $450 million at current price levels. With his stake, Kimbal is one of the largest individual shareholders of TSLA shares. However, his stake pales in comparison to Elon Musk’s 150 million shares.
Regarding the purchase, Kimbal Musk tweeted that Tesla is “just getting started”. He continued, “I can’t wait for the next great decade from my brother and his amazing team.”
This isn’t Musk’s first headline regarding TSLA stock
Earlier this year, Kimbal Musk came to the attention of the SEC for possible insider trading. Here’s a quick overview.
In September, Elon Musk created a 10b51 plan to sell some of his holdings, which has not been disclosed to the public. On November 5, Kimbal Musk then unloaded over $108 million worth of TSLA stock. He sold about 15% of his holdings, giving up 88,500 shares. The next day, Elon Musk published a now infamous article Twitter (NYSE:TWTR) poll asking him if he should sell 10% of his holdings. This caused the stock price to fall.
At the time, TSLA stock had just hit all-time highs, but quickly faded after Musk’s tweet. That said, the insider trading case is not easy to prove in this scenario. Elon Musk insists Kimbal Musk was unaware of the Twitter poll in advance. Either way, with Kimbal having recently absorbed 25,000 shares of TSLA, this may bode well for sentiment. It also helps that Tesla just released a pretty strong second quarter earnings report.
Plus, you know what they say: there are a hundred reasons insiders sell, but only one reason they buy – because they think the stock is going to go up.
As of the date of publication, Bret Kenwell held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
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