Elon Musk is almost halfway through unloading 10 percent of his Tesla ownership like he promised to 63 million Twitter fans last month. His latest sale is a block of 934,091 Tesla shares, worth $1.01 billion, on Thursday, new regulatory filings show.
That brings his total Tesla stock sell-off to $10.9 billion since he launched a Twitter poll on November 6 asking his followers whether he should cash out 10 percent of his Tesla ownership, a stake worth $25 billion at current market price, to prepare for Washington’s potential tax on unrealized capital gain.
“Much is made lately of unrealized gains being a means of tax avoidance, so I proposed selling 10 percent of my Tesla stock,” he tweeted at the time.
As it turned out, however, the Tesla CEO has a huge tax bill coming up that he can’t avoid regardless of what new tax law Congress might pass. Musk owns a block of soon-to-expire stock options that allow him to buy roughly 22.8 million Tesla shares at $6.24 apiece and sell them instantly at market price, which currently is above $1,000.
Those stock options were awarded to Musk in 2012 and are set to expire in August next year. Exercising them in full would result in a $15 billion tax bill because gains from this type of transaction are subject to the top federal and state income rates, which, in this case, would add up to over 50 percent.
So far, Musk has exercised about half of those options and bought 10.7 million Tesla shares. He has also sold 10.1 million shares to cover tax withholding obligations related to the exercise. He still has options to buy about 10 million more shares.
Musk owns 193.3 million Tesla shares, representing about one fifth of the electric carmaker. The flurry of stock sales since November are unusual for the CEO, who’s known for holding on to company equity instead of cash even in times of surging stock price.
Below is every Tesla transaction Musk has initiated since the Twitter poll on November 6. Data are compiled from Tesla’s SEC filings:
November 8: Sale of 930,000 Tesla shares, worth $1.1 billion
November 9: 3.01 million shares, worth $3.3 billion
November 10: 488,000 shares, worth $550 million
November 11: 634,000 shares, worth $685 million
November 12: 1.2 million shares, worth $1.24 billion
November 15: 926,000 shares, worth $925 million
November 16: 910,000 shares, worth $938 million
November 23: 893,000 shares, worth $1.04 billion
December 2: 934,000 shares, worth $1.01 billion