In additional SEC filings late Wednesday, Tesla (TSLA) has confirmed that CEO Elon Musk has sold roughly $5 billion worth of stocks.
More sales are expected throughout the week.
Yesterday, we reported that Tesla revealed that Musk exercised about $2.3 billion worth of Tesla stock options and sold about $1.1 billion worth to cover the tax burden the comes with exercising the shares.
Over the next few hours, the automaker filed several more transactions from Musk confirming that the CEO unloaded about 4.5 million shares worth over $5 billion.
The transactions were executed in batches between November 8 and 10 as Tesla’s stock fell in price by more than 12%.
The sales came after Musk said he would sell 10% of his stake in Tesla if a Twitter poll would agree, which it unsurprisingly did.
10% of his stake at the time of the poll would be roughly 17 million shares, and therefore, we should expect more sales to continue throughout the week and even next week.
Tesla has three days to report any insider trading from executives and directors to the SEC.
As previously reported, Musk also has billions more in Tesla stock options that he needs to exercise over the next year before they expire.
As I previously stated, I believe this Twitter poll and sale of Tesla’s stock is more or less a ploy from Musk to justify selling stocks at this record high price to cover his upcoming large tax burden.
He is going to get tens of billions of dollars’ worth of Tesla stock options through his CEO grants over the next year and tax experts expect him to have to pay between $10 billion and $15 billion in taxes on them.
This first tranche worth $2.3 billion was just the beginning.
It makes sense for him to sell now at this new record high that Tesla is hitting to cover his taxes and bank the new shares.
He was going to pay taxes anyway, and for investors, it looks better if he makes it look like his first sale of Tesla shares in five years is due to him succumbing to social pressure about the rich not paying taxes on unrealized gains, as he made it sound in the Twitter poll.
The timing is also good for him just after Tesla pushes to new record highs.
But either way, he would have had to pay taxes on the options. I believe with those new stock options in the next years, Musk is going to be the best paid CEO in the world by a wide margin and also be the individual who pays the most in taxes (total amount not in percentage of revenue).
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