Mon. Dec 6th, 2021

Elon Musk sold about $ 1.1 billion of his Tesla shares on Wednesday, days after promising to pay in 10 percent of his stake as Twitter users voted for him to make the sale.

The sales, which were unveiled late in a regulatory filing, were made under the kind of blind trading plan that managers often use to avoid suspicions of insider trading, and which are frequently used to spread sales over a period of time.

Musk has been silent on possible share sales since announcing in a tweet Saturday that he would sell the 10 percent stake, currently worth about $ 18 billion, if a Twitter poll supported the idea. It was unclear whether Wednesday’s sales were the first installment to meet its promise. The sale accounted for about half a percent of its stake in Tesla.

Although Musk attracted a lot of attention by apparently leaving it to the Twitter sphere to see if he sold shares, the regulatory submissions showed that he set Wednesday’s sales in motion when he accepted the blind trading plan in September.

He has also said in the past that he expects to sell a significant portion of his Tesla interest to cover the tax that will be owed on options worth ten billion dollars to be exercised by next August.

The transactions announced on Wednesday showed Musk exercising about $ 2.3 billion worth of trading options on the stock closing at the close of trading. He paid only $ 13.4 million for the shares underlying the options, which had an exercise price of $ 6.24, compared to Tesla’s closing price of $ 1,067.95.

Musk said he expects a personal income tax rate of more than 50 percent on the profit he made from exercising options, meaning he will have to spend more than half of the shares acquired at the time of each option exercise sold to cover his tax bill.

Tesla’s chief executive on Saturday was silent on the need to pay taxes on its expected option gains. Instead, he tweeted that he was opening it up to Twitter users to decide whether to sell his shares, as “lately a lot is being made from unrealized gains that are a form of tax avoidance”.

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