Elon Musk Sells Nearly $5 Billion in Telsa Shares

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Musk
Courtesy of Dave Pinter (Flickr CC0)

A few days ago Elon Musk conducted a Twitter poll asking his fans if he should dispose of 10% of his stake in the electric carmaker, Telsa.  On Monday, he exercised his options and sold a portion of his 2.1 million shares. He raised around $1.1 billion to pay taxes relating to the transaction.

Then he sold another 3.6 million shares of the electric carmaking company stock on Tuesday and Wednesday.  On average those shares are priced around$1,082 each. Between the two days, the stock shares Musk sold were worth about $3.9 billion. Monday’s sales sold at $1,180 a share.

Musk
Courtesy of NVIDIA Corporation (Flickr CC0)

Musk sold his shares on Monday “solely to satisfy [his] tax withholding obligations related to the exercise of stock options,” according to filings with U.S. securities regulators. The flurry of trades carried out Tuesday and Wednesday was not marked as being scheduled sales.

He is selling a separate block of the electric vehicle company shares, according to a plan Musk set into motion on September 14, 2021. He plans on trading around 930,000 shares worth more than $1.1 billion.

The revelations of the filings show that he had plans of selling shares prior to the Twitter poll. Between Monday to Tuesday, Tesla shares slumped over 15%. On Wednesday, the stock rose over 4%.

Musk has additional options set to expire. Musk will have to report to the value of the stock shares as regular income — at a 40.3% federal tax rate — some state taxes are expected. If the shares stay near their current value, his federal tax bill could be almost $11 billion.

The sales he made this week will not have as high taxes to pay due to him owning the stocks outright. Musk has owned around 80% of his portfolio shares since the 2010s initial public offering (IPO) of Tesla.

Practically all of the cash he made from selling the 3.6 million shares — between Tuesday and Wednesday — will be taxed at 20% and be considered a long-term capital gain. This will result in an additional tax bill equaling around $776 million on top of any taxes owed for the exercise of his options.

Written by Sheena Robertson

Sources:

CNN: Elon Musk just sold $5 billion worth of Tesla stock; by Chris Isidore and Jill Disis

CBS News: Elon Musk sells around $5 billion of Tesla stock; by Lora Kolodny Christine Wang

Inset Image Courtesy of NVIDIA Corporation’s Flickr Page – Creative Commons License

Top and Featured Courtesy of Dave Pinter’s Flickr Page -Creative Commons License

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