Saturday, January 22

Elon Musk Sells $ 5 Billion In Tesla Stock After Twitter Poll

Tesla CEO Elon Musk dumped $ 5 billion in stock from the electric car maker, shortly after taking a poll on Twitter about whether he should sell 10% of his massive stake in the company.

The world’s richest person so far has dumped more than 4.5 million shares this week, according to regulatory filings on Wednesday. Those were his first sales in more than five years.

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Musk, who posts frequently to Twitter and often engages in controversial topics, created a firestorm over the weekend with the poll on whether he should sell part of his stake in Tesla, which connected to a debate on whether the ultra-wealthy are paying your money. fair share of taxes. The survey, which resulted in a casting vote for its sale, saw the automaker’s shares tumble 16% in two days as investors worried about the consequences of ditching such a large block of shares.

On Monday, Musk dumped about $ 1.1 billion worth of stock to pay income taxes on stock options that he also exercised that day, two of the filings showed. Those transactions were carried out on the basis of a pre-established trading plan adopted in mid-September.

On Tuesday and Wednesday he made the remaining sales. The filings detailing those eliminations did not indicate that they were planned in advance.

The documents do not shed light on whether Musk’s weekend Twitter poll had anything to do with his decision to make some or all of the transactions, or whether he will continue to sell until he reaches the 10% threshold. To get there, you would have to ditch approximately 17 million shares, and even more if you also include exercisable options in your total holdings.

Musk’s options came from a grand prize he received in 2012. He would have to exercise them before next August or they would expire. Taxes on these transactions are generally covered by the immediate disposal of some of the newly acquired shares. Earlier this year, Musk said publicly that he would likely exercise his 2012 award options in the near future.

It is possible that the options exercises and related sales were executed independently of the result of the Twitter survey, since they were carried out under a pre-established plan. But the terms of those plans are not subject to public disclosure, and executives have wide latitude to cancel or change them at any time.

Still, the headline-grabbing Twitter referendum hit Tesla shares on Monday and Tuesday, erasing $ 50 billion from Musk’s net worth. Tesla rose 4.3% on Wednesday to close at $ 1,067.95, cutting losses this week to less than 13%.

After the first trades were unveiled, stocks were up 2.7% in post-market trades. Many of the filings came after it ended, but Tesla’s tokens on the FTX crypto exchange dropped to around $ 1049 at 2:06 p.m. in Hong Kong on Thursday.

The billionaire last sold shares in 2016, when he exercised options and liquidated some of the newly acquired shares to cover about $ 590 million in income taxes.

In his Nov. 6 poll announcement, Musk wrote that “there is a lot of talk lately that unrealized gains are a means of tax avoidance, which is why I propose to sell 10% of my Tesla stock.” Almost 58% of the 3.5 million votes were cast in favor of a sale.

Musk, 50, is the richest person in the world with a fortune of nearly $ 300 billion, according to the Bloomberg Billionaires Index.

© 2021 Bloomberg

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