According to SEC documents SEC, Tesla CEO Elon Musk sold 9,34090 shares of Tesla stock on the day of December 28, local time, at a valuation of US$1.02 billion. Musk has sold approximately 15,702,784 Tesla shares since November 8, accounting for 92.09% of his previously committed shares.
At the close of trading on Tuesday, Tesla quoted a price of US$1088.47, with a market value of US$1.09 trillion. Tesla’s documents show that in accordance with the 10b5-1 rule trading plan formulated in September, Musk has exercised stock options that expire next year and sold some shares to pay taxes.
After a series of sell-offs, Musk still has millions of stock options that will expire in August next year, and it is expected that they will be sold further. According to a poll conducted by Musk on Twitter in November, he plans to sell 10% of Tesla’s shares. At the time, he held slightly more than 170 million shares of Tesla, so in theory, he planned to sell about 17 million shares to fulfill his promise on Twitter.
In 2012, two years after Tesla went public, Tesla’s board of directors assigned Musk a task to achieve 10 operational goals. Each time one was achieved, the company’s market value increased by 4 billion U.S. dollars (market value). The goal is to surpass traditional car companies, 32+40×10=432>350), which gives Musk 0.5% of stock options, for a total of 5%. Later, Musk achieved all performance evaluation goals except gross profit margin, and finally obtained 26.34 million options.
Because these options will expire on August 13, 2022, Musk must exercise the options before then, that is, turn the options into stocks. With the options in hand, Musk can buy 26.34 million shares of Tesla at a price of $6.24. That is, to spend 164 million U.S. dollars (6.24×2634=1.64), based on Tesla’s current stock price of about 1,000 U.S. dollars, the value of the equity obtained is about 26 billion U.S. dollars.
But the US Internal Revenue Service believes that this part of the option is Musk’s income, which needs to be taxed like salary. The total tax that Musk needs to pay for options is about 15 billion U.S. dollars. Although Musk is the world’s richest man, it is difficult to spend so much money all at once.
On November 6, Musk announced on Twitter that if users voted in favor, he would reduce his holdings of Tesla stock by 10% (about 17 million shares). 58% of users expressed support, so Musk officially started to reduce holdings.
