Elon Musk sells more than $5 billion in Tesla stock after Twitter poll
After making a promise on Twitter, Tesla CEO Elon Musk has sold about 4.5 million shares of the electric car maker's stock, raising over $5 billion.
The sales, disclosed in 10 regulatory filings late Wednesday, amount to about 3% of Musk's stake in the company. After the transactions, Musk still owns about 167 million Tesla shares.
About $1.1 billion will go toward paying tax obligations for stock options granted to Musk in September.
But the Reuters news agency reports it wasn't clear if the sale was actually associated with the poll results, and said Tesla didn't reply when asked to comment.
Reuters said Tesla stock rose 4.1% in early trading on the Frankfurt bourse on Thursday, adding that investors "downplayed the significance of Musk's trading for the stock's outlook."
Still, brokers told Reuters Tesla shares could face some ups-and-downs on various equities markets Thursday.
Last weekend, Musk said he would sell 10% of his holdings in the company, worth more than $20 billion, based on the results of a poll he conducted on Twitter. The sale tweets caused a sell-off of the stock Monday and Tuesday, but it recovered some on Wednesday. The shares were up 2.6% to $1,096 in extended trading Wednesday, and they have risen more than 50% this year.
The filings also disclosed that Musk exercised options to buy just over 2.1 million shares for $6.24 each. The company's stock closed Wednesday at $1,067.95 per share.
The tax transactions were "automatically effected" as part of a trading plan adopted on Sept. 14 to sell options that expire next year, according to forms filed with the U.S. Securities and Exchange Commission. That was nearly two months before he floated the idea of the sale on Twitter.
Musk was Tesla's largest shareholder as of June, owning about 17% of the company, according to data provider FactSet. He's the wealthiest person in the world, according to Forbes, with a net worth of around $282 billion, most of it in Tesla stock.
"Bizarre" Twitter poll
Wedbush Analyst Daniel Ives calculated that Musk has about $10 billion in taxes coming due on stock options that vest next summer.
"Following the bizarre Twitter poll Musk put out over the weekend on his 10% ownership stake to be sold, it appears Musk walked the walk and thus has started selling Tesla shares into year-end," Wedbush analysts said in a report. "The question will be for investors if he sells his full 10% ownership stake over the coming months or is it done piece by piece heading during 2022."
The sometimes abrasive and unpredictable Musk said he proposed selling the stock as some Democrats have been pushing for billionaires to pay taxes when the price of the stocks they hold goes up, even if they don't sell any shares. However, the wording on unrealized gains, also called a "billionaires tax," was removed from President Joe Biden's budget, which is still being negotiated.
"Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock," Musk tweeted Saturday afternoon. "Do you support this?"
Before the billionaires tax was taken out of Mr. Biden's budget, Musk's poll had received pushback from at least one Democratic lawmaker who has been advocating for a billionaires tax on the likes of the Tesla CEO, Amazon.com founder Jeff Bezos and others.
"Whether or not the world's wealthiest man pays any taxes at all shouldn't depend on the results of a Twitter poll," Senator Ron Wyden, a Democrat from Oregon, wrote in response to Musk's tweet. "It's time for the Billionaires Income Tax.
Tesla doesn't pay Musk a cash salary, but he has received huge stock options. "I only have stock, thus the only way for me to pay taxes personally is to sell stock," Musk tweeted.
Tesla Inc. is based in Palo Alto, California, although Musk has announced it will move its headquarters to Texas.