Musk sells nearly $5 billion worth of Tesla stock

Elon Musk sold nearly $5 billion ($27 billion at current prices) in his Tesla shares in the first three days of this week, soon after promising he would sell 10% of his stake if Twitter users voted in favor of measure.

Tesla’s chief executive has not commented on possible share sales since the poll, held on Saturday (11). Currently, its stake in the company is valued at around US$18 billion (R$100 billion).

It was unclear whether the series of transactions disclosed in regulatory documents after the market closed on Wednesday (10) was the first installment to fulfill its promise, but at least some of the divestitures were planned well before its maneuver on Twitter.

While Musk has attracted a great deal of attention in the opinion that he left it up to the “Twittersphere” to decide whether he would sell shares, regulatory filings show that at least $1.1 billion of the sales were triggered when he blindly adopted a trading plan in September .

The arrangement, known as the 10b5-1 plan, is often used by executives to avoid suspected insider trading, and is often used to spread sales over a period of time. The files covering subsequent sales made on Tuesday and Wednesday do not specify whether they occurred under the blind transaction agreement.

Musk has previously said he hoped to sell a significant portion of his stake in Tesla to cover taxes that will be levied on tens of billions of dollars in options that must be exercised by next August.

Transactions disclosed on Monday showed that Musk had exercised some options, bringing him shares worth approximately US$2.3 billion (R$12.9 billion) at the close of trading. He paid just $13.4 million (BRL 75 million) for the shares underlying the options, which had an exercise price of $6.24 (BRL 34.94), compared to Tesla’s closing price. in the second, US$ 1,162.94 (R$ 6,512.46). Shares tumbled the next day but rebounded, closing up 4.3% at $1,067.95 (R$5,980.52) on Wednesday.

Musk said he expects to face a personal income tax rate of more than 50% on the profits he makes from exercising options, meaning he would have to sell more than half of the shares acquired at the time of each option exercise to cover taxes.

Tesla’s chief executive said nothing Saturday about the need to pay taxes on his expected earnings from options. Instead, he tweeted that he would let Twitter users decide whether he should sell his shares, as “a lot is said lately about unrealized gains being a form of tax evasion.”

Translated by Luiz Roberto M. Gonçalves