Tesla (NASDAQ:TSLA) has been trading rather well lately. Ever since shares shot up roughly 10% on July 21 after reporting earnings, TSLA stock has acted positively. Now today, Tesla is getting another boost from an insider purchase.
Many investors probably would have preferred an insider purchase from CEO Elon Musk, but today’s purchase instead comes from Kimbal Musk. The brother of Elon Musk, Kimbal has been a board member for Tesla since 2004. He also serves on the board for SpaceX and served as a board member at Chipotle Mexican Grill (NYSE:CMG) from 2014 to 2019.
As for the purchase, Kimbal Musk bought a hefty amount of TSLA stock on Monday. Then on Wednesday evening, the executive file a Form 4 with the U.S. Securities and Exchange Commission (SEC). Reportedly, he purchased another 25,000 shares.
Kimbal Musk’s cost basis on the latest tranche was $74.17 per share, or about $1.85 million in total. Now, he owns 536,240 shares of Tesla amounting to about $450 million at current price levels. With his stake, Kimbal is one of the largest individual shareholders of TSLA stock. However, his stake pales in comparison to Elon Musk’s well-over 150 million shares.
Regarding the purchase, Kimbal Musk tweeted that Tesla “is just getting started.” He continued, “I can’t wait for the next decade of awesome from my brother and his amazing team.”
This Is Not Musk’s First Headline Regarding TSLA Stock
Earlier this year, Kimbal Musk attracted the SEC’s attention for potential insider trading. Here’s a quick rundown.
Back in September, Elon Musk created a 10b51 plan to sell a portion of his holdings, which was not disclosed to the public. On Nov. 5, Kimbal Musk then unloaded more than $108 million worth of TSLA stock. He sold roughly 15% of his holdings, dumping 88,500 shares. The next day, Elon Musk posted a now-infamous Twitter (NYSE:TWTR) poll asking whether he should sell 10% of his holdings. That caused the share price to tumble.
At the time, TSLA stock had just made all-time highs, but faded quickly after Musk’s tweet. That said, the insider trading case is not easy to prove in this scenario. Elon Musk insists that Kimbal Musk did not know about the Twitter poll ahead of time. Regardless, with Kimbal recently soaking up 25,000 shares of TSLA stock, that may bode well for sentiment. It also helps that Tesla just reported a pretty solid Q2 earnings report.
Plus, you know what they say: There are a hundred reasons for insiders to sell, but only one reason they buy — because they think the stock will go higher.
On the date of publication, Bret Kenwell did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.