After making a promise on Twitter, Tesla CEO Elon Musk has sold around 900,000 shares of the electric car maker, which is more than US $ 1.1 billion that will be used to pay tax obligations for options. purchase of shares.
The sales, disclosed in two regulatory documents Wednesday night, will cover tax obligations for stock options granted to Musk in September.
He exercised options to purchase just over 2.1 million shares at a price of US $ 6.24 each.
Tesla stock closed at US $ 1,067.95 per share on Wednesday.
The trades were “automatically executed” as part of a trading plan adopted on Sept. 14 to sell options that expire next year, according to forms filed with the US Securities and Exchange Commission.
It was almost two months before he pitched the idea for the sale on Twitter.
After the trades, Musk still owns around 170 million Tesla shares.
Musk was Tesla’s largest shareholder in June, owning around 17% of the company, according to data provider FactSet.
He is also the richest person in the world, according to Forbes, with a net worth of around US $ 282 billion, most of which is held in Tesla shares.
Last weekend, Musk announced he would sell 10% of his stake in the company, worth more than US $ 20 billion, based on the results of a survey he conducted. on Twitter.
The sell tweets caused stocks to sell off on Monday and Tuesday, but they recovered some on Wednesday. The shares rose 2.6 percent to US $ 1,096 in extended trading on Wednesday, and they are up more than 50 percent this year.
Wedbush analyst Daniel Ives said it looked like Musk would start selling shares at the end of the year.
“The question will be for investors whether he will sell his entire 10% stake in the next few months, or will it be piece by piece in 2022,” Ives wrote in a note to investors.
Ives calculated that Musk has about US $ 10 billion in taxes payable on stock options that vest next summer.
The sometimes abrasive and unpredictable Musk has said he is proposing to sell the shares because some Democrats have pressured billionaires into paying taxes when the price of the shares they hold rises – even if they don’t sell any shares.
However, wording on unrealized gains, also known as the “billionaire tax,” has been removed from President Joe Biden’s budget, which is still being negotiated.
“There has been a lot of talk lately about unrealized gains as a means of tax evasion, so I am proposing to sell 10% of my Tesla shares,” he tweeted on Saturday afternoon. “Do you support this? “
There has been a lot of talk lately about unrealized gains as a means of tax evasion. I therefore propose to sell 10% of my Tesla shares.
Do you support that?
Musk said he would respect the results of the poll, which ended with 58% of the more than 3.5 million votes calling him to sell the stock.
Tesla does not pay Musk a cash salary.
“I only have stocks, so the only way I can personally pay taxes is to sell stocks,” Musk tweeted.
Tesla Inc. is based in Palo Alto, Calif., Although Musk has announced that it will move its headquarters to Texas.