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Tesla Chief Executive Officer Elon Musk unloaded stock in the electric car-maker, shortly after holding a poll on Twitter over whether he should sell 10% of his massive stake in the company.
The world’s richest person on Nov. 8 exercised 2.15 million options at a price of $6.24 per contract, according to a regulatory filing Wednesday. He subsequently sold 934,000 shares to collect about $1.1 billion.
The shares were sold “solely to satisfy the reporting person’s tax withholding obligations related to the exercise of stock options,” the filing said. It also showed that the transactions were made based on a pre-arranged trading plan adopted in mid-September.
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The contracts, which came from a stock option award Musk received in 2012, were set to expire in August of next year, meaning he would have had to exercise them before then. Exercises of such contracts trigger income taxes, which usually are covered by immediately disposing of some of the newly acquired shares.
At companies with a loyal following, like Tesla, executive share sales tend to draw scrutiny by fans and critics alike. Musk, who earlier this year had said he would likely exercise the options in the near future, may have avoided potential criticism by launching the poll.
Still, the headline-grabbing event pummeled Tesla stock on Monday and Tuesday, wiping out $50 billion from Musk’s net worth. Tesla rose 4.3% on Wednesday to close at $1,067.95, paring losses this week to less than 13%. After the disclosure, the stock rose more than 2% in post-market trading.
It’s the billionaire’s first sale since 2016, when he last exercised stock options and liquidated some of his newly acquired shares to cover about $590 million of income taxes.
The sale followed a Nov. 6 poll Musk set up on Twitter, saying that “much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.” Almost 58% of the 3.5 million votes were cast in…
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Source : time
