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WHAT ARE HIS OPTIONS

Elon Musk finally began honoring his Twitter poll

Tesla's gigafactory in Gruenheide
Reuters/Michele Tantussi/File Photo
Will he sell more shares?
  • Ananya Bhattacharya
By Ananya Bhattacharya

Tech reporter

Published

Elon Musk sold 4.5 million Tesla shares for more than $5 billion in the last few days.

The sale comes days after the Tesla CEO kicked up a Twitter storm by asking his 63 million followers whether he should sell 10% of his stake in the company. The majority said yes. The poll shaved off nearly $200 billion from the trillion-dollar automaker’s value, and Musk’s personal wealth also took a $50 billion hit.

The stock has recovered a little since the sale.

Why did Elon Musk sell his shares?

Leaving aside the Muskness of performatively doing business on Twitter, the transaction helped him exercise some stock options from 2012.

While Musk’s trust sold nearly 3.6 million shares, worth around $4 billion, between Nov. 8 and 10, the billionaire tech baron himself sold another 934,000 shares for $1.1 billion after exercising options to buy nearly 2.2 million shares. The options-related sale was made based on a pre-arranged trading plan set up in September, regulatory filings made public by the Securities and Exchange Commission (SEC) yesterday (Nov. 10) show.

The last time the Tesla chief sold any shares was in 2016. Back then, too, he exercised stock options and footed a $600 million income tax bill.

Will Elon Musk sell more shares?

Probably, yes.

For one, Musk has only made a small dent in his Twitter promise to sell 10% of his stake. To fulfill his obligations to the fanbase, Musk needs to ditch $21 billion worth of shares in total.

Secondly, Musk still has more than 20 million further stock options that expire in August 2022. And the world’s richest man is looking at a way bigger $15 billion tax payout this time.

Another theory proposed by investor Michael Burry, who inspired the 2015 film The Big Short, is that Musk wants to—nay, needs to—sell shares to cover personal loans. “There is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30,” he tweeted earlier this week.

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