Nov 11 (Reuters) – Tesla Inc (TSLA.O) Chief Executive Elon Musk disclosed on Wednesday that he sold about $5 billion in shares, just days after the billionaire polled Twitter users about offloading 10% of his stake in the electric carmaker.
It was the first time that Musk cashed out on a stake of that size since the electric carmaker was founded in 2003.
Musk said on Saturday he would sell 10% of his stake if Twitter users agreed. The billionaire owned a combination of about 244 million shares through his trust and stock options, bringing his stake in the electric car maker to about 23% as of the end of June. The stake included 170 million shares held by his trust.
Then a flurry of transactions this week, his first share sale since 2016, reduced Musk’s direct and indirect stake in Tesla to 168 million shares, from 170 million shares.
The remaining 3.6 million shares in Tesla, worth around $4 billion, were sold through his trust on Tuesday and Wednesday.
The sale of a combined 4.5 million shares equates to about 3% of Musk’s shares in Tesla.
Musk had an option to buy 22.86 million shares at $6.24 each, which expire on Aug. 13, according to a Tesla filing.
After his exercise on 2.15 million stocks on Monday, he has options for 20 million more shares he needs to exercise by next August.
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DATE
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MUSK SHARES IN TESLA
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10% OF HIS STAKE
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NOV.6, 2021
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170 MLN SHARES
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17 MLN SHARES
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DATE
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SHARES SOLD
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NOV. 8-10, 2021
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4.5 mln
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WHY DID MUSK CONSULT TWITTER USERS ABOUT THE STOCK SALES?
Musk has not responded to questions about why he launched a Twitter poll about the stock sales before embarking on them. It is also not clear whether the way he went about it breached any securities rules.
The stock sales that Musk launched were massive by capital market standards, bigger than the initial public offerings of most companies. By getting Twitter users to greenlight the move, he skirted speculation that he was cashing out because Tesla’s valuation had become frothy after its shares reached record highs.
WHAT WILL MUSK DO WITH THE CASH?
Musk has not said how he will spend or invest roughly $4 billion he will pocket from the stock sales so far, which are taxable at capital gains rates. Musk, the world’s richest man, had traditionally been content with having his wealth, pegged by Forbes at close to $280 billion, tied up in his Tesla stake.
He has borrowed against his Tesla shares to raise cash.
Musk, also CEO of Space X, said on Wednesday that making life multi-planetary is the “main reason for accumulating capital.”
