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Elon Musk sells $5 billion of Tesla stock

Tesla CEO Inc. Elon Musk sold $5 billion in shares of the electric carmaker, shortly after fueling a social media debate about the tax treatment of billionaires’ shares.

The world’s richest person has sold more than 4.5 million shares so far this week, according to regulatory filings. It was his first sale in more than 5 years.

Musk, who often causes controversy on Twitter, created a firestorm over the weekend with a survey asking if he should sell a portion of his Tesla shares. While he describes his proposal as related to the debate over tax avoidance by the super-rich, filings released Wednesday show some transactions were pre-arranged in mid-September – several last week poll. Nor did he mention in the tweets that he has millions of stock options that must be exercised before next August, when they expire.

The poll resulted in a decisive vote for Musk to sell and sent Tesla shares down 16% in the first two days of the week. Shares offset those declines on Wednesday, closing up 4.3% and up 2.2% to $1,091.53 at 9:35 a.m. New York time.

On Monday, Musk sold off $1.1 billion worth of stock to pay income taxes on stock options he also exercised that day, two of the filings show. On Tuesdays and Wednesdays, he makes the remaining sale. Records detailing those liquidations do not indicate that they were planned in advance.

The documents do not shed light on whether Musk’s weekend Twitter poll is related to his decision to make some or all of his deals – or whether he will continue selling until when the 10% threshold is reached or not. To get there, he would have to get rid of about 17 million shares and even more if he also includes exercise options in his total holdings.

The options Musk exercised came from a large prize he received in 2012. Taxes on such transactions are usually paid for by the immediate liquidation of some of the newly acquired shares. Earlier this year, Musk said publicly that he would likely exercise the selections earned from the 2012 award in the near future.

It is possible that the options and related selling exercises will be performed regardless of the outcome of the poll, since they are carried out according to a pre-arranged plan. But the terms of such plans are not publicly disclosed, and operators have wide latitude to cancel or modify them at any time.

Legal filings show the billionaire still has 21.6 million exerciseable options left from the 2012 prize, all of which will need to be exercised at some point before next August, or else they will. will expire.

The referendum that caused a stir on Twitter affected Tesla shares on Monday and Tuesday, wiping $50 billion off Musk’s net worth.

The billionaire last sold stock in 2016, when he exercised his options and liquidated some of his newly acquired shares to cover about $590 million in income taxes.

In the November 6 poll announcement, Musk wrote that “recently having a lot of unrealized gains is a tax avoidance, so I propose to sell 10% of Tesla’s stock.” me”. Nearly 58% of the 3.5 million votes were in favor of the sale.

Musk, 50, is worth nearly $300 billion, according to the Bloomberg Billionaires Index.

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