Insider Weekends – Elon Musk Purchases Another $25 Million of Tesla Stock

Welcome to edition 417 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $125.17 million of stock compared to $59.2 million in the week prior. Selling also increased with insiders selling $2.24 billion of stock last week compared to $1.61 billion in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped to 17.89. In other words, insiders sold almost 18 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 27.22.

Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

Notable Insider Buys:

1. Discovery, Inc. (DISCA): $27.17

Director John C. Malone acquired 1,407,000 shares of this global media company, paying $23.44 per share for a total amount of $32.98 million. These shares were purchased indirectly through a trust.

This follows an $8.5 million purchase of Discovery by Mr. Malone in December and a 10,000 share purchase by the CFO last month. Another director, David Wargo, also purchased shares in December and last month.

With AT&T (T) finally getting court approval for its vertically integrated acquisition of Time Warner and both Comcast (CMCSA) and Disney (DIS) in a bidding war for Fox (FOXA), it is possible that insiders of Discovery are seeing the company well positioned for an acquisition.

You can view the list of recent insider transactions for Discovery, Inc. here.

2. Tesla, Inc. (TSLA): $358.17

CEO Elon Musk acquired 72,500 shares of this auto manufacturer, paying $343.78 per share for a total amount of $24.92 million. These shares were purchased indirectly through a trust.

We wrote the following after a nearly $10 million purchase of Tesla by Mr. Musk last month,

It was interesting to see this purchase shortly after he dismissed pertinent analyst questions in Tesla’s last earnings conference call as “boring, bonehead questions”. This is his first open market purchase of Tesla stock as all his prior purchases were related to participating in secondary offerings. It will be interesting to see how and when Tesla does another offering and if the stock will continue going up as it has done after all prior offerings.

The stock is up nearly 20% since his last purchase and it feels like he is taunting short sellers with his purchases like he did with his tweets. These purchases appear to fall more in the category of “signaling the market” considering Mr. Musk has leveraged his holdings of Tesla to tune of billions of dollars according to Forbes.

You can view the list of recent insider transactions for Tesla, Inc. here.

3. Palo Alto Networks, Inc. (PANW): $214.6

Chief Executive Officer Nikesh Arora acquired 95,650 shares of this network security company, paying $209.15 per share for a total amount of $20 million. Mr. Arora increased his stake by 48.16% to 294,247 shares with this purchase.

Mr. Arora joined Palo Alto Networks as its CEO earlier this month and previously served as the COO of SoftBank where he was expected to succeed Masayoshi Son.

You can view the list of recent insider transactions for Palo Alto Networks, Inc. here.

4. MercadoLibre, Inc. (MELI): $303.82

Director Meyer Malka acquired 49,978 shares of this online commerce platform, paying $298.89 per share for a total amount of $14.94 million. These shares were purchased indirectly through various funds.

You can view the list of recent insider transactions for MercadoLibre, Inc. here.

5. Biglari Holdings Inc. (BH-A): $980.14

Director Sardar Biglari, acquired 3,774 shares of this holding company, paying $978.79 per share for a total amount of $3.69 million. These shares were purchased indirectly by Biglari Capital Corp.

You can view the list of recent insider transactions for Biglari Holdings Inc. here.

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Walmart Inc. (WMT): $83.7

Director Robson S. Walton sold 3,913,718 shares of Walmart for $84.35, generating $330.13 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Walmart Inc. here.

2. Facebook, Inc. (FB): $195.85

Shares of Facebook were sold by 5 insiders:

• COB and CEO Mark Zuckerberg sold 1,117,000 shares for $190.72, generating $213.03 million from the sale. These shares were sold indirectly by various entities.
• Chief Operating Officer Sheryl Sandberg sold 55,000 shares for $192.32, generating $10.58 million from the sale. These shares were sold indirectly through a trust.
• Chief Technology Officer Michael Todd Schroepfer sold 38,009 shares for $192.34, generating $7.31 million from the sale. These shares were sold indirectly through a trust.
• Chief Product Officer Christopher K. Cox sold 10,600 shares for $191.07, generating $2.03 million from the sale.
• VP and General Counsel Colin Stretch sold 750 shares for $192.55, generating $144,413 from the sale.

You can view the list of recent insider transactions for Facebook, Inc. here.

3. Twitter, Inc. (TWTR): $45.8

Director Evan Clark Williams sold 682,242 shares of Twitter for $43.85, generating $29.92 million from the sale. These shares were sold indirectly by various trusts and entities.

You can view the list of recent insider transactions for Twitter, Inc. here.

4. Copart, Inc. (CPRT): $58.22

Shares of this online auctions and vehicle remarketing company were sold by 3 insiders:

• Chief Executive Officer Jayson A. Adair sold 200,000 shares for $57.47, generating $11.49 million from the sale. These shares were sold indirectly through a trust.
• Director Thomas N. Tryforos sold 140,000 shares for $57.51, generating $8.05 million from the sale. These shares were sold indirectly by Elias Charles & Co. LLC.
• Executive Vice President William E. Franklin sold 100,000 shares for $57.52, generating $5.75 million from the sale.

You can view the list of recent insider transactions for Copart, Inc. here.

5. Cerner Corporation (CERN): $61.87

Vice Chairman Clifford W. Illig sold 411,200 shares of this healthcare information technology company for $60.40, generating $24.84 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Cerner Corporation here.

You can view the full list of sales from this Insider Sales page.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer: I hold a long position in Twitter (TWTR). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

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