Elon Musk sells another $1 billion in Tesla shares, nearing 10% target


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Elon Musk, Tesla CEO, stands in the foundry of the Tesla Gigafactory during a press event.
Patrick Pleul | picture alliance | Getty Images

Tesla and SpaceX CEO Elon Musk has sold another 934,090 shares, or about $1.02 billion worth of his holdings, in his electric car and solar business according to financial filings published late Tuesday.

Musk also exercised options to buy nearly 1.6 million Tesla shares at a strike price of $6.24 per share, granted to him via a 2012 compensation package.

In exercising his options this quarter, Musk’s holdings in Tesla have increased from about 170.5 million shares to over 177 million shares, the Wall Street Journal first reported.

Since Nov. 8, Musk has been on a selling spree, partly to pay his looming tax bills on those options.

The celeb-CEO polled his tens of millions of Twitter followers in the first week of November asking if he should sell 10% of his stake in Tesla. They voted yes. But a major portion of the sales that followed the entertaining Twitter poll were part of a plan that Musk adopted in September this year.

Under 10b5-1 rules, corporate insiders (including CEOs) can trade their own equity as part of pre-announced portfolio management plan. They must declare in advance when and how they plan to trade to protect themselves from later accusations of insider trading.

This year, Tesla shares have risen more than 54% making Musk the world’s wealthiest person. His net worth is now over $275 billion, according to estimates by Forbes.

That wealth is derived from Musk’s ownership stakes in Tesla and SpaceX. He currently doesn’t take a salary or cash bonuses, and had not sold a large number of shares in Tesla until this year. He had, instead, taken out sizable loans against a portion of his Tesla shares.

Since taxpayers only pay taxes on income or stock once it is sold, Musk never paid a large amount in taxes annually relative to his net worth, ProPublica previously reported.

Earlier this month, Sen. Elizabeth Warren, D-Mass., tweeted that Musk was “freeloading off everyone else,” since he didn’t pay federal income taxes in 2018.

Now, Musk is expected to pay what is likely to be the largest single individual tax bill in U.S. history, with federal and California income taxes estimated to top $11 billion. He will be required to pay this tax bill in order to receive compensation of more than $23 billion, in the form of stock options that would otherwise expire in August.

The centi-billionaire discussed his riches and tax strategy during a bevy of December press appearances, including interviews with the Financial Times and Time Magazine after both outlets both named him person of the year for 2021.

Capping off his year-end publicity efforts, Elon Musk sat with the conservative satire site The Babylon Bee on Tuesday last week. During that interview he said, “I sold enough stock to get to around 10% plus the option exercise stuff and I tried to be extremely literal here.”

The next day on Twitter, Musk clarified, “This assumes completion of the 10b sale.” And noted, “When the 10b preprogrammed sales complete. There are still a few tranches left, but almost done” in a subsequent tweet.

By some estimates, Musk still has more than a million more shares to sell to reach his 10% November target of around 17 million shares. Tesla did not respond to a request for comment or more information about the sum total he plans to sell to hit that goal.

CNBC’s Thomas Franck and Robert Frank contributed reporting