dependencyinjection , 2 months ago

I don’t want to defend CEOs here, but there is a code for in the USA, Rule 10b5-1, which sets out a CEOs stock trading plan.

The reason, if you’re not Elon Musk, is that most CEOs are paid in stock and so it’s inevitable they’re going to sell some. So they set out a plan to say I will sell X shares on X date and the market shouldn’t be spooked.

What Elon did here is sell 45 million shares, seemingly outside of any plan, which is insane. Usually they wouldn’t be offloading such a volume.

Selling a small amount of your stock doesn’t indicate you don’t have faith in your own company, but more that you want to convert some of your reward (pay) into actual cash.

I’m not saying the system is good, just that this is how it works.