Tesla's Post-Election Surge: A Windfall for the Chair

Tesla Inc. Chair Robyn Denholm cashed in on a well-timed sale of shares this month, reaping more than $35 million from stock that soared after the U.S. election. Denholm exercised 112,390 stock options that were set to expire next year and sold the shares on Nov. 15, according to a regulatory filing. She prearranged the transactions in July through a trading plan that U.S. company insiders can use to sell stock.

The surge in Tesla's stock price can be attributed to several factors, including investor hopes that CEO Elon Musk's close ties with President-elect Donald Trump will benefit the company. Trump has tapped Musk to co-lead a newly created Department of Government Efficiency, an agency tasked with reducing government expenditure and slashing excess regulations. This appointment has fueled investor confidence in Tesla's prospects under the new administration.



Tesla shares broke out above the top trendline of a cup and handle pattern last week on the highest trading volume since early July, indicating the potential for follow-through buying. Investors should watch key support levels on Tesla's chart around $300 and $265, while monitoring a crucial overhead area near $400.

The potential closure of the $7,500 leasing loophole, as discussed by Stifel Nicolaus analyst Stephen Gengaro, may have contributed to Tesla's post-election stock surge. This loophole allows lessees to claim the full $7,500 federal tax credit, even if they don't purchase the vehicle. With the loophole closed, Tesla's Model 3, priced around $40,000, would still qualify for the credit while lower-priced models from competitors may not, giving Tesla a competitive edge. This could drive demand and boost Tesla's stock price.



Trump's win could accelerate Tesla's full-self driving initiatives, as President Trump could help expedite approvals, a critical part of Tesla's medium-term story. Additionally, Tesla's strong market position could mitigate any changes in government EV mandates. Wedbush's prolific analyst Dan Ives went as far as raising his price target on Tesla's stock by 33% to $400, which implies a further 15% upside from current levels and makes Ives the biggest bull on Tesla on Wall Street.

In conclusion, Tesla's post-election stock surge has proven to be a windfall for Chair Robyn Denholm, who cashed in on the opportunity to sell shares worth over $35 million. The surge in stock price can be attributed to investor hopes in Elon Musk's ties with the new administration, the potential closure of the leasing loophole, and the acceleration of full-self driving initiatives. As Tesla continues to navigate the EV market, investors should keep an eye on key support and resistance levels, as well as the potential impact of regulatory changes on the company's prospects.

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