Musk sold another $931 million worth of stock on Monday, bringing his total stock sales over the past six trading days to $7.8 billion. He sold some stocks in those days.
Monday’s Tesla stock sale is 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 insiders like the CEO are allowed to set up a stock sale plan so that the sale happens automatically without being affected by non-public information they may have about the company.
Sales
according to a Twitter poll he took on November 6 and 7, in which he asked his followers whether he should sell his 10% stake in the company to increase his taxable income. But Monday’s sales increased due to the need to exercise the call options on the shares he holds before they expire in August next year, along with a requirement that he pay taxes on those shares. when he does.
The filing he made with the Securities and Exchange Commission on Monday said the latest sale was made “just to satisfy [Musk’s] tax withholding obligation relating to the exercise of a stock call option to purchase 2,107,672 shares as reported herein. “And it said he is exercising his call options on the shares, which expire in August 2022, to exercise an ‘orderly sale of shares involving the exercise of the options’ before they expire. .
The exercise of options on Monday and subsequent sales is almost identical
for the transactions he completed last Monday.
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 amount he received for the sale was due to the reduced price of
Tesla (TSLA) shared during last week. The amount he sold was one of the factors that pushed the stock price down.
The net value of the stock at the time the option is exercised will be considered taxable income,
taxed at the federal tax rate of 40.8%. He could end up with a federal tax bill of nearly $10 billion once he exercises all those options that expire soon, depending on the value of the stock at the time the stock was purchased.
The other sales he completed between last Monday and this Monday came from Tesla stock, which he held outright. Musk has held most of that stock since Tesla’s 2010 IPO. This sales revenue will be taxed only as long-term capital gain at a tax rate of 20%.
Stock sales still reflect less than 5%
Tesla (TSLA) share. That, and the fact that he still owns call options for an additional 18.6 million shares, all of which expire next August, means that further stock sales are almost certain.
