Elon Musk sells $1.1B in Tesla stock in wake of Twitter promise
CBC
After making a promise on Twitter, Tesla CEO Elon Musk has sold about 900,000 shares of the electric car company's stock, netting over $1.1 billion US that will go toward paying tax obligations for stock options.
The sales, disclosed in two regulatory filings late Wednesday, will cover tax obligations for stock options granted to Musk in September.
He exercised options to buy just over 2.1 million shares for $6.24 US each.
Tesla's stock closed Wednesday at $1,067.95 US per share.
The transactions were "automatically effected" as part of a trading plan adopted on Sept. 14 to sell options that expire next year, according to forms filed with the U.S. Securities and Exchange Commission.
That was nearly two months before he floated the idea of the sale on Twitter.
After the transactions, Musk still owns about 170 million Tesla shares.
Musk was Tesla's largest shareholder as of June, owning about 17 per cent of the company, according to data provider FactSet.
He's also the wealthiest person in the world, according to Forbes, with a net worth of around $282 billion US, most of it held in Tesla stock.
Last weekend, Musk said he would sell 10 per cent of his holdings in the company, worth more than $20 billion US, based on the results of a poll he conducted on Twitter.
The sale tweets caused a sell-off of the stock Monday and Tuesday, but it recovered some on Wednesday. Shares were up 2.6 per cent to $1,096 US in extended trading Wednesday, and they have risen more than 50 per cent this year.
Wedbush analyst Daniel Ives said it appears Musk will start selling shares as the year ends.
"The question will be for investors if he sells his full 10 per cent ownership stake over the coming months, or is it done piece-by-piece during 2022," Ives wrote in a note to investors.
Ives calculated that Musk has about $10 billion US in taxes coming due on stock options that vest next summer.