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Elon Musk sells additional Tesla stock worth more than $1.2 billion

The Tesla CEO reported selling 1.2 million shares on Friday, worth more than $1.2 billion, according to a regulatory filing made public late Friday. Those sales came on top of more than $5.6 billion worth of stock sales earlier this week.

Mr. Musk took to Twitter this past weekend, pledging to unload 10% of his stock in the electric-vehicle company he runs. At that time, he owned roughly 170 million shares.

To make good on his Twitter pledge, Mr. Musk likely would need to sell more than 10 million additional shares, following his sales Friday and based on his total holdings as of last weekend. The precise number depends on how he defines his ownership stake.

Tesla didn’t respond to a request for comment.

Mr. Musk—the world’s richest person, according to the Bloomberg Billionaires Index—remains Tesla’s largest investor by far, even after the stock sales that have been disclosed in regulatory filings.

This week’s sales by Mr. Musk rank among the largest-ever by a chief executive over a few days, according to research firm Equilar Inc. Amazon.com Inc. founder Jeff Bezos earlier this year—before relinquishing his CEO title—sold 2 million shares in his company over little more than a week for proceeds of roughly $6.6 billion, according to Equilar.

Tesla shares fell 2.83% to $1,033.42 on Friday. Tesla shares have slumped in the wake of Mr. Musk’s Saturday poll, declining by about 15% this week. Despite that decline, Tesla stock is trading near record highs, with the company valued at more than $1 trillion.

Mr. Musk, who exercised just over 2 million stock options on Monday, faces an August 2022 deadline to exercise more than 20 million additional options or let them expire worthless.

Further stock sales could go a long way toward paying a massive tax bill that Mr. Musk could owe upon exercising those vested options. The difference between the value of Tesla’s stock when Mr. Musk exercises his options and the exercise price of $6.24 will be taxable income.

Mr. Musk reported selling more than 900,000 shares on Monday, worth a total of roughly $1.1 billion, to cover tax withholding obligations.

Monday’s option exercise and sales were made under a preset trading plan Mr. Musk established on Sept. 14, according to regulatory filings, almost two months before he raised the idea of a sale on Twitter. Such trading arrangements, called 10b5-1 plans, are designed to enable company insiders to sell based on a set schedule, price triggers or other factors without running afoul of insider-trading rules.

The filings disclosing Mr. Musk’s subsequent sales of more than 4 million shares from Tuesday through Friday don’t include the same footnotes about preset trading plans and tax withholding obligations.

Tesla investors may need to brace for more turmoil in the stock, said Ben Silverman, director of research at InsiderScore, which tracks executive-trading data.

“I don’t think the volume of Musk’s transactions will create volatility. I think volatility comes from the interpretation of his actions and his own words,” Mr. Silverman said.

Mr. Musk has long been reluctant to sell Tesla stock. Selling shares could weaken his control over the company. Unlike Meta Platforms Inc., formerly Facebook Inc., and Google parent Alphabet Inc., Tesla lacks a dual-class of stock ownership that gives founders supervoting power over common shareholders. Mr. Musk sold nearly $600 million worth of stock in 2016 to pay taxes, Equilar data show.

In a Nov. 6 tweet, Mr. Musk framed the idea of a share sale in terms of a continuing debate about how some of America’s wealthiest individuals should be taxed.

Mr. Musk doesn’t accept a cash salary from Tesla. In a tweet last Saturday, he said that “the only way for me to pay taxes personally is to sell stock.”

The options expiring in August are part of a 2012 pay package. Since then, Mr. Musk has secured additional options. Exercising them could trigger volatility down the road. Mr. Musk’s next major deadline to exercise a large number of options looms in 2028, according to a Tesla regulatory filing, though he faces 2023 deadlines to exercise some vested options.

 

This story has been published from a wire agency feed without modifications to the text

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