Elon Musk sells another $ 931 million in Tesla stock

New York (CNN Business) – Tesla CEO Elon Musk’s sales of his company’s stock continued on Monday. His latest performance promises there will be more.

Musk sold another $ 931 million in stock on Monday, bringing his total share sales over the last six trading days to $ 7.8 billion. He has sold a few shares each of those days.

Monday’s Tesla stock sales are part of a plan he established two months ago to exercise an even larger block of stock options before they expire next August. Company insiders, such as CEOs, can set up a stock sale plan to be done automatically without being affected by non-public information they may have about the company.

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The sales follow a survey on Twitter, which Musk conducted on November 6 and 7, in which he asked his followers if he should sell 10% of his stake in the company to increase his taxable income.

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But this Monday’s sales were driven more by the need to exercise the stock options you have before they expire next August, along with the requirement to pay taxes on those shares once you do.

In filings with the Securities and Exchange Commission on Monday, they said the latest sales were made “solely to satisfy tax withholding obligations. [de Musk] related to the exercise of the stock options of 2,107,672 shares as reported in this document. “And it said that he was exercising the stock options, which expire in August 2022, to have an” orderly sale of actions related to the exercise of the options “before they expire.

The exercise of the options on Monday and the subsequent sales were almost identical to the transactions you made on Monday of last week.

On November 8, Elon Musk exercised 2.2 million options and sold 934,000 shares for $ 1.1 billion. This Monday, he exercised 2.1 million options and sold 934,000 shares again. The difference in the money he received from the sales was due to the drop in Tesla’s stock price over the course of the last week. The number of sales you made is one of the factors that drove the share price down.

The net value of the shares at the time the options are exercised will be treated as taxable income, taxed at a federal tax rate of 40.8%. You could end up with a federal tax bill close to $ 10 billion once you exercise all those options that will soon expire, depending on the value of the stock at the time of purchase.

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The other sales it made between last Monday and this Monday came from the Tesla shares that it already owned directly. Elon Musk held the majority of those shares since Tesla’s initial public offering in 2010. Those sales will only be taxed as a long-term capital gain at a 20% tax rate.

Stock sales still represent less than 5% of its shares of Tesla. That, and the fact that he still has options to buy another 18.6 million shares, all of which expire next August, means that additional share sales are virtually certain.

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Elon Musk sells another $ 931 million in Tesla stock