Tesla Faces Market Turmoil as James Murdoch Sells Shares
Tesla shareholders have encountered yet another setback as James Murdoch, a longtime board member and son of media magnate Rupert Murdoch, exercised and promptly sold a significant portion of his stock options. His decision contributed to Tesla’s worst single-day loss since September 2020.
Stock Sale Amid Market Decline
According to Tesla’s filing on Monday, Murdoch—who has served on the board since July 2017—exercised 54,776 stock options granted as part of his compensation package. He then proceeded to sell them the same day, earning approximately $13.2 million. His decision comes at a precarious time for the company, as its stock has endured four consecutive weeks of declines, erasing previous market gains.
Murdoch is not the only high-profile figure to liquidate Tesla stock in recent weeks. Tesla chair Robyn Denholm, Kimbal Musk (Elon Musk’s younger brother), and CFO Vaibhav Taneja have also sold shares, raising concerns among investors about the company’s leadership and financial outlook.
This development follows Murdoch’s involvement in a January settlement with a Delaware court, in which several Tesla board members agreed to return a total of $920 million in excess compensation they had received.
Tesla has not issued a public response to inquiries regarding the matter.
Investor Concerns and Community Backlash
Tesla’s stock-based compensation model, long seen as an incentive for executives, is now facing heightened scrutiny. Unlike Denholm’s sale, which was executed under a pre-arranged trading plan (10b5-1), Murdoch’s transaction was conducted at his discretion, raising questions about the timing of his decision given the company’s declining stock performance.
The sale has fueled frustration among Tesla’s dedicated retail investors, many of whom have been vocal about their loyalty to the company despite market volatility. Online forums and social media platforms have been flooded with discussions, as shareholders attempt to boost morale and discourage further sell-offs.
One notable response came from investment strategist Mayur Thaker, who previously called for Denholm’s removal due to her stock sales but later retracted his statement, acknowledging the financial obligations she faced due to the Delaware settlement.
Mounting Challenges for Tesla
Tesla’s current sentiment among investors appears to be at its lowest point since Elon Musk’s acquisition of Twitter in October 2022, an event that initially triggered a stock decline. The company has also faced disruptions in the Chinese market, which significantly impacted first-quarter sales in 2024.
Amid these challenges, Musk sought to reassure investors by announcing the unveiling of Tesla’s Robotaxi on August 8, 2024, and expediting the launch of a new entry-level Tesla model in 2025. However, with just a few months remaining, no concrete updates have been provided regarding the vehicle’s development.
While Tesla managed to increase vehicle deliveries in 2023, it did so by slashing prices—a strategy that inadvertently weakened EV resale values and caused consumer hesitation. This decline in demand ultimately led to Tesla’s first annual sales drop since the launch of the Model 3 in 2017.
Looking Ahead
As Tesla’s stock struggles to regain momentum, investors are watching closely for strategic moves from the company’s leadership. With concerns over executive stock sales, market competition, and shifting consumer sentiment, Tesla faces a critical period that could shape its long-term financial stability and investor confidence.
