Tesla Chief Executive Officer Elon Musk unloaded $5 billion of stock in the electric-car maker, shortly after restoking a social media debate over the tax treatment of billionaires’ shareholdings.
The world’s richest person so far has disposed of more than 4.5 million shares this week, according to regulatory filings. Those were his first sales in more than five years.
Musk, who frequently stokes controversy on Twitter, created a firestorm over the weekend with a survey asking whether he should sell part of his Tesla stake. While he portrayed his proposal as having to do with debate over billionaires avoiding taxes, the filings released Wednesday show some of the transactions were pre-arranged in mid-September — weeks before the poll. He also didn’t mention in the tweets that he has millions of stock options that must be exercised before next August, when they expire.
The poll resulted in a decisive vote for Musk to sell and sent Tesla shares down 16 per cent in the first two days of the week. The stock pared those declines Wednesday, closing up 4.3 per cent, and rose 2.5 per cent before the start of regular trading Thursday.
On Monday, Musk offloaded about $1.1 billion worth of stock to pay income taxes on equity options that he also exercised that day, two of the filings showed. On Tuesday and Wednesday, he carried out the remaining sales. The filings detailing those disposals didn’t indicate that they were pre-planned.
The documents shed no light on whether Musk’s weekend Twitter poll had any bearing on his decision to carry out some or all of the transactions — or whether he’ll keep selling until he’s met the 10 per cent threshold. To get there, he’d have to get rid of roughly 17 million shares, and even more if he also includes exercisable options in his total holdings.
The options Musk exercised came from a big award he received in 2012. Taxes on such transactions are usually covered by immediately disposing of some of the newly acquired shares. Earlier this year, Musk said publicly that he likely would exercise options earned from the 2012 award in the near future.