As the billionaire offloads shares worth $1bn, financial filings show the move was planned weeks before he asked followers’ opinion
Elon Musk’s recent Twitter poll asking if he should offload 10% of his Tesla stocks to pay taxes was met with a clear “yes”. Financial filings released late on Wednesday showed the billionaire has since sold nearly a million shares; but was it because of the poll results?
The filings reveal Musk has sold about 900,000 shares – netting over $1.1 bn that will go towards paying tax obligations. It comes a few days after nearly 60% of his 3.5m Twitter poll respondents encouraged him to sell, with Musk saying he would “abide by the results”. But the filings show that his plan had been in place since mid-September, and was already scheduled to go into effect.
The transactions were “automatically effected” as part of a trading plan adopted on 14 September to sell options that expired next year, according to financial documents. That was nearly two months before he floated the idea of the sale on Twitter.
The sales will cover tax obligations for the stock options granted to Musk. He exercised options to buy just over 2.1m shares for $6.24 each. The company’s stock closed on Wednesday at $1,067.95 a share.
And in selling, he wasn’t alone. Millions of dollars worth of Tesla shares have been dumped by current and former board members since the end of October, when Tesla’s market capitalisation surpassed $1tn. Musk’s brother, Kimbal Musk, also reportedly sold shares amounting to around $109m before Elon’s poll went live.
Before Musk posted his poll, US Senate Democrats proposed a plan to tax billionaires’ stocks both as a way to finance Joe Biden’s agenda and reel in the rich who exploit loopholes to defer capital gains taxes.
“The last thing you do when offloading a massive exposure is to reveal your hand,” Chris Weston, the head of research at the broker Pepperstone in Melbourne, told the Associated Press earlier this week. “The buyers tend to step away when you have an overhang like this, but this is no ordinary story and is Musk’s way of getting back at the proposal to tax the elite with gains on unrealised profits.”
At the end of September, Musk announced that he would have to sell roughly $15bn in shares. “I have a bunch of options that are expiring early next year, so a huge block of options will sell in Q4,” he said at the time. “Because I have to, or they’ll expire.” Analysts expect more sales are coming.
Daniel Ives, a Wedbush analyst, wrote in a note to investors: “The question will be for investors if he sells his full 10% ownership stake over the coming months or is it done piece by piece during 2022?”
After the transactions, Musk still owns about 170m Tesla shares, and selling 10% of that would be closer to $21bn, according to calculations done by Reuters.
Tesla did not respond to a request for comment before publication.
The Associated Press contributed reporting
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