SpaceX owner and Tesla CEO, Elon Musk, arrives on the red carpet for the 2020 Axel Springer Awards on December 1, 2020 in Berlin, Germany.
Britta Pedersen | beautiful pictures
By Elon Musk sell 906 million dollars in Tesla Monday’s stock brings him one step closer to his ultimate sales goal. The big question: what is the goal?
Based on his November Twitter poll, Musk plans to sell 10% of its Tesla shares. At the time, he owned just over 170 million shares, so in theory he planned to sell about 17 million shares to make Commitment on Twitter.
As of Tuesday morning, he has sold a total of 11.9 million shares, according to InsiderScore/Verity. Sales were spread across a dizzying 680 sales totaling around $12.7 billion. Based on his 10% target, he is likely to sell another 5 million shares — which, at Monday’s closing price of around $966, would be more than $4.8 billion.
However, it could be more. Musk is making two types of stock sales – one to pay taxes on his compensation package and the other for straight cash, aka “pocket” sales.
The main reason Musk is selling is to pay taxes on the exercise of options that expire next summer. As part of the 2012 compensation package, the Tesla CEO was selected for 22.8 million shares that expire next August. Options were valued at more than $28 billion when Musk started selling shares, which means his tax bill will be as high as 15 billion dollars.
The stock has since dropped more than 20%, along with his tax bill. According to InsiderScore/Verity, Musk sold 6.5 million shares to pay taxes on about 15 million options. To exercise all of his options — likely because letting them expire would leave billions of dollars behind — Musk would likely exercise another 7.8 million options and sell $4 billion or more, respectively. to pay taxes.
From a tax perspective, he could have 4 or 5 more sales of 934,000 shares (the amount sold in each final tax-related sale) before closing for the year.
The big unknown is how many more shares he can sell for cash or the proceeds “out of pocket”. To date, he has sold about 5.4 million shares for direct cash, unrelated to his options exercises or taxes. If all of his revenue from here on out is tax-related, he has only $4 billion left to sell. However, if he continues to sell for cash – to help fund Space-X or other business ventures – the number could go higher.
Based on his 10% target, Musk will likely sell just another $5 billion before the end of the year. However, if he has other plans or needs for cash, sales can go even higher.
