Tesla Inc., CEO Mr. Elon Musk unloaded $5 billion of stock in the electric car-maker, shortly after conducting a poll on Twitter on whether he should sell his substantial 10% stake in the company or not.
The world’s richest man has settled more than 4.5 million shares so far this week, according to regulatory filings on Wednesday – his first sale in more than five years. On Monday, he unloaded nearly $1.1 billion of stock to pay income tax on equity options, which he also exercised that day, two filings showed. Those transactions were made based on a pre-arranged business plan adopted in mid-September.
Musk executed the remaining sales on Tuesday and Wednesday. Filings detailing those settlements did not indicate that they were pre-planned.
The documents shed no light on whether Musk’s Twitter poll over the weekend had any bearing on his decision to commit some or all of the transaction — or whether he’ll continue selling until he hits the 10% limit. To get there, it would have to get rid of about 17 million shares, and even more, if it included exercisable options in its total holdings.
The choices Musk used came from a major award he received in 2012. They must use them before August of next year, or they will expire. Taxes on such transactions are usually covered by immediately disposing of some of the newly acquired shares. Earlier this year, Musk publicly stated that he would exercise the options earned from the 2012 award in the near future.
It is possible that the option exercise and related sale would have been carried out regardless of the results of the Twitter poll, given that they were carried out under a pre-arranged plan. But the terms of such plans are not subject to public disclosure, and officials have wide latitude to cancel or modify them at any time.
Still, the headline-grabbing Twitter referendum toppled Tesla shares on Monday and Tuesday, wiping $50 billion off Musk’s net worth. Tesla closed up 4.3% on Wednesday at $1,067.95, narrowing losses this week to less than 13%. After the first few trades were disclosed, the stock rose 2.7% in post-market trading.
In his November 6 poll announcement, Musk wrote that “having a tax evasion instrument has made a lot of unrealized gains lately, so I propose to sell 10% of my Tesla stock.” Of the 3.5 million votes cast, about 58 percent were in favor of sales.