James Murdoch's Stock Sale Triggers Tesla's Steepest Plunge Since 2020

In recent developments, Tesla's board member James Murdoch exercised his options on March 10, acquiring 531,787 Tesla ordinary shares and selling 54,776 shares, resulting in a cash-out of approximately $13.2 million. The move has intensified Tesla's most severe single-day stock price drop since September 2020.

James Murdoch, son of Australian media mogul Rupert Murdoch, has been serving as a non-executive director at Tesla since he joined the board in July 2017. Despite Tesla's stock having been in decline for four consecutive weeks, Murdoch opted to sell at this juncture, further erasing gains the company had seen post the Trump election victory.

This series of declines has plunged Tesla's stock to its lowest point since the third-quarter report release last October. The motivation behind Murdoch’s decision might be questioned, yet it indisputably impacts Tesla's loyal retail investors. Many continue sharing their purchase order screenshots on social media to rally support and urge fellow investors to resist panic selling, aiming to prevent a "prisoner's dilemma" style chain reaction.

Tesla's CEO, Elon Musk, candidly acknowledged on March 10 that running his business has become "very difficult". Responding to the stock's plunge, Musk expressed optimism on social media, stating, "Everything will be fine in the long run," referencing Tesla's largest intraday decline in its history.

Reflecting on the situation, it's notable that merely four months ago, following Trump's election, Tesla stock saw a peak at $488.54. However, those gains have now been reversed amidst what's being described as Tesla’s election halo effect. Musk seems caught between managing his business interests and personal political engagements, which have affected brand perception and sales.

Furthermore, Tesla's leadership seems strategic in their financial maneuvers, having previously engaged in significant share sales. Over the past month, the Chairman of the Board disposed of $76 million worth of stocks, while the CFO sold $4.5 million worth.

As Musk navigates personal and professional challenges, the broader implications for Tesla remain uncertain. His focus on political matters may inadvertently affect both domestic and global sales, with significant declines reported in key markets such as Europe and China. Tesla's stakeholders are now watching closely as Musk attempts to stabilize the company amid an increasingly volatile environment.