Musk sells off US$5 billion of Tesla stock
PRICE DOWN 13%
Tesla Inc. chief executive Elon Musk unloaded US$5 billion of stock in the electric-car maker, shortly after fuelling a social media debate over the tax treatment of billionaires’ shareholdings.
The world’s richest person has disposed of more than 4.5 million shares so far this week, according to regulatory filings. Those were his first sales in more than five years.
Musk, who frequently stokes controversy on Twitter, created a firestorm over the weekend with a survey asking whether he should sell part of his Tesla stake. While he portrayed his proposal as having to do with debate over the ultra-wealthy avoiding taxes, the filings released Wednesday show some of the transactions were pre-arranged in mid-september — weeks before the poll. He also didn’t mention in the tweets that he has millions of stock options that must be exercised before next August, when they expire.
The headline-grabbing referendum resulted in a decisive vote for Musk to sell, sending the stock tumbling over Monday and Tuesday, and wiping US$50 billion from Musk’s net worth. On Thursday, Tesla shares slipped 0.4 per cent to US$1,063.51, bringing this week’s decline to 13 per cent.
On Monday, Musk off-loaded about US$1.1 billion worth of stock to pay income taxes on equity options that he also exercised that day under a pre-arranged plan, two of the filings showed. On Tuesday and Wednesday, he carried out the remaining sales.
The documents shed no light on whether Musk’s weekend Twitter poll had any bearing on his decision to carry out some or all of the transactions — or whether he’ll keep selling until he’s met the 10 per cent threshold. To get there, he’d have to get rid of roughly 17 million shares, and even more if he also includes exercisable options in his total holdings.
The billionaire last sold shares in 2016, when he exercised options and liquidated some of the newly acquired stock to cover about US$590 million of income taxes.
In his Nov. 6 poll announcement, Musk wrote that “much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10 per cent of my Tesla stock.”