Following the results of a Twitter poll, Tesla Inc (NASDAQ:TSLA) CEO Elon Musk sold Tesla shares worth around $5 billion. The sale is his first since 2016 and takes place the same week he was reported to have lost $50 billion when shares of the automotive giant plummeted 16%.
It has been an action-packed week for Elon Musk. Over the weekend, he created a Twitter poll to ask his 62.7 million followers whether he should sell 10% of his Tesla stake, which went 58% in favor. Later in the week –and seemingly due to the post– he lost $50 billion.
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Now, according to CNN, Musk has consummated the sale of Tesla shares worth $5 billion as, based on filings with U.S. securities regulators, he exercised options Monday “and then sold nearly half of the 2.1 million shares he received, raising about $1.1 billion in cash to pay taxes relating to the transaction.”
According to additional filings, the electric vehicle tycoon sold another 3.6 million shares on Tuesday and Wednesday –with “an average price of some $1,071 per share, those sales were worth about $3.8 billion.”
The filing establishes that Monday's sale was “solely to satisfy [Musk's] tax withholding obligations related to the exercise of stock options.” The other filings, however, did not state any reason for the sales.
Nearly 9% of the exercised options had to be exercised before their expiration in August next year. Also, “taking that 9% will result in a $1 billion federal tax bill, under the top federal income tax rate of 37%, with another 3.8% net investment tax on top of that,” CNN reports.
Before this week’s transactions, Elon Musk owned 170.5 million Tesla shares worth $182 billion –according to the close on Wednesday– which leaves him with unexercised options on 71.4 million shares that involve 20.7 million due to expire in August 2022.
Despite the Twitter poll –which was criticized on Fox Business by Jason Kats, UBS managing director and senior portfolio manager– the offload was already planned weeks earlier, Business Insider reports.
Further, “Musk offloaded far less than his Twitter poll suggested he might. According to the filings, Musk owns 170.5 million shares in addition to the 2.15 million he exercised on Monday, meaning his sale of 4.5 million amounts to less than 3% of his total Tesla holdings.”
Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.