After promise, Musk sells $1.1B in Tesla shares to pay taxes
After making a promise on Twitter, CEO Elon Musk has sold about 9,00,000 shares of the electric car maker's stock, netting over $ 1.1 billion that will go toward paying tax obligations for stock options.
The sales, disclosed in two regulatory filings late Wednesday, will cover tax obligations for stock options granted to Musk in September. He 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 transactions were "automatically effected" as part of a trading plan adopted on September 14 to sell options that expire next year, according to forms filed with the US Securities and Exchange Commission. That was nearly two months before he floated the idea of the sale on Twitter.
After the transactions, Musk still owns about 170 million Tesla shares.
Musk was Tesla's largest shareholder as of June, owning about 17 percent 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.
Ives calculated that Musk has about $ 10 billion in taxes coming due on stock options that vest next summer.
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 unrealised 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," he tweeted Saturday afternoon. "Do you support this?"
Musk said he would abide by the results of the poll, which ended with 58 percent of more than 3.5 million votes calling for him to sell the stock.
Tesla does not pay Musk a cash salary. "I only have stock, thus the only way for me to pay taxes personally is to sell stock," Musk tweeted.