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Business News

Elon Musk sells Tesla stock worth $5 billion after promising to abide by Twitter poll

today11/11/2021

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Elon Musk has sold shares on his company’s stock worth $5 billion (£3.73 billion) after promising to abide by a Twitter poll.

The Tesla chief executive had asked his followers whether he should sell 10% of his holdings and 57.9% of the voters supported the sale.

Musk said: “I was prepared to accept either outcome.”

The money generated from the sales – disclosed in two regulatory filings late on Wednesday – will cover tax obligations for stock options granted to Musk in September.

He exercised options to buy just over 2.1 million shares for $6.24 (£4.66). On Wednesday, the company’s stock closed at $1,067.95 dollars (£796.72) per share.

In his first sale since 2016, he sold 3.6 million Tesla shares, worth around $4 billion (£2.98 billion), and a further 934,000 shares worth $1.1 billion (£820 million).

It equates to around 3% of his total holdings in the electric vehicle manufacturer.

More on Elon Musk

The sale follows a proposal by Democrat US senators to tax billionaires’ stocks and other tradeable assets and end a loophole that has allowed them to defer capital gains taxes.

After the transactions, Musk – the world’s richest billionaire – still owns around 170 million Tesla shares.

A tenth of his Tesla holdings is worth around $20 billion (£14.92 billion). Tuesday’s poll caused a sell-off of the stock on Monday and Tuesday.

The stock has risen by 4.3% but remains down 12.6% for the week.

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Wedbush analyst Daniel Ives said it appears Musk will start selling shares as the year ends.

“The question will be for investors if he sells his full 10% ownership stake over the coming months or is it done piece-by-piece during 2022,” he said.

Including stock options, the tycoon owns a 23% stake in Tesla – which, despite producing far fewer vehicles than conventional rivals – is the world’s most valuable car company by market capitalisation.

Elon Musk dances onstage during a delivery event for Tesla Model 3 cars in Shanghai
Image: He still owns 170 million Tesla shares

It topped $1trn last month, becoming the fifth company to do so after Apple, Microsoft, Amazon, and Google owner Alphabet.

The Twitter poll came after Musk tweeted in 2018 that he had “funding secured” to possibly take Tesla private in a $72bn deal.

 Sky News

© Sky News 2021

Written by: Rother Radio News


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today11/11/2021