Elon Musk, Tesla’s CEO, sold another $931 million of his company’s shares on Monday (15), bringing his total share sales during the past six trading days to $7.8 billion. The billionaire sold some shares over those days.
Tesla’s stock sales are part of a plan he set up two months ago to exercise an even larger block of stock options before they expire next August.
Company members, such as CEOs, can establish a stock sale plan so that sales occur automatically without being affected by non-public information they may have about the company.
The sales follow a Twitter survey he conducted on Nov. 6 and 7, in which he asked followers if he should sell 10% of his stake in the company to increase his taxable income.
But Monday’s sales were driven more by the need to exercise the stock options he holds before they expire next August, along with the requirement that he pay tax on those stocks once he does.
The filings he filed with the SEC – Securities and Exchange Commission (and the equivalent of the CVM in Brazil) on Monday said the latest sales were made “solely to satisfy the withholding tax obligations related to the exercise of call options. shares for the purchase of 2,107,672 shares, as informed here.”
And it said it was exercising the stock options, which must expire in August 2022 in order to have an “orderly sale of shares related to the exercise of the options” before they expire.
The exercise of options on Monday and subsequent sales were almost identical to the transactions he completed on Monday of last week.
On November 8, Musk exercised 2.2 million options and sold 934,000 shares for $1.1 billion. On Monday, he exercised 2.1 million options and again sold 934,000 shares.
The difference in the money he received from the sales was due to the drop in Tesla’s share price (TSLA) over the past week. The number of sales he made is one of the factors that pushed the stock price down.
The net value of the shares at the time the options are exercised will be treated as taxable income, taxed at a federal borrowing rate of 40.8%.
He could end up with a federal tax bill close to $10 billion once he exercises all those options soon to expire, depending on the value of the shares at the time the shares are purchased.
The other sales he completed between Monday (8) and this Monday (15) came from Tesla shares that he already held directly. Musk has owned the majority of these shares since Tesla’s IPO in 2010. These sales will be taxed only as a long-term capital gain at a rate of 20% tax.
Stock sales still reflect less than 5% of its shares in Tesla (TSLA). That, and the fact that he still has options to call an additional 18.6 million shares, all due out this August, means that additional stock sales are virtually certain.
*Translated text. Click here to read the original.
Quiz Maker – powered by Riddle
Reference: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
