Tesla's Elon Musk sells $930 million in shares to cover stock option tax

Tesla’s Elon Musk sells $930 million in shares to cover stock option tax

Elon Musk sold another $973 million in stock to pay taxes after exercising options on Tuesday, filings showed after the electric vehicle maker’s shares rebounded during regular trade. 

Musk acquired 2.1 million shares worth $2.2 billion at the Tuesday closing price and sold 934,091 for $973 million to pay taxes, the SEC filings showed.

In a sector surge spearheaded by Rivian Automotive Inc and Lucid Group Inc, Tesla Inc rose 4.1% to close at $1,054.73, leaving its market capitalization down about $187 billion since before Musk began selling shares last week.

Over the past week, Musk has sold about 8.2 million Tesla shares for around $8.8 billion. Those sales fulfill almost half of his pledge on Twitter to sell 10% of his stake in Tesla. Musk began selling shares last week after floating the idea in a Twitter poll.

With electric-car makers increasingly in demand on Wall Street, Tesla’s stock has surged more than 150% in the past 12 months. The two options-related sales were set up in September via a trading plan that allows corporate insiders to establish preplanned transactions on a schedule, the filings said.

As of the end of 2020, he had an option to buy 22.86 million shares, which expire in August next year, a Tesla filing shows. On November 6, Musk polled Twitter users about selling 10% of his stake, pushing down Tesla’s share price after a majority on Twitter said they agreed with the sale. It was not clear how or whether the trading plan related to Musk’s Twitter poll.

BEIJING, CHINA – OCTOBER 23: (CHINA OUT) Elon Musk, Chairman, CEO and Product Architect of Tesla Motors, addresses a press conference to declare that the Tesla Motors releases v7.0 System in China on a limited basis for its Model S, which will enable self-driving features such as Autosteer for a select group of beta testers on October 23, 2015 in Beijing, China. The v7.0 system includes Autosteer, a new Autopilot feature. While it’s not absolutely self-driving and the driver still need to hold the steering wheel and be mindful of road conditions and surrounding traffic when using Autosteer. When set to the new Autosteer mode, graphics on the driver’s display will show the path the Model S is following, post the current speed limit and indicate if a car is in front of the Tesla. (Photo by Visual China Group via Getty Images/Visual China Group via Getty Images)

In the last few days, Tesla stock prices dropped substantially, since Musk announced about selling more than 10 percent of his stock holdings in the electric vehicle manufacturing company. Tesla shares on Monday closed at $1,013.39.

However, the decision to sell off Tesla shares by Elon Musk didn’t come as a sudden move. But, both these sell-offs come as well-calculated ones, as the report suggests. These two options-related sales were decided in September through a pre-planned trading plan.

However, when Musk polled Twitter users on November 6 about selling 10 percent of his stake, it pushed the EV maker’s share price down, as 58 percent of the 3.5 million voters said yes. 

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