Elon Musk’s big Tesla (TSLA) selloff is about 60% complete

December 6, 2021 by admin 36 Comments

By Simon Alvarez

Posted on December 3, 2021

Regulatory filings on Thursday have revealed that CEO Elon Musk has sold another 934,091 Tesla (NASDAQ:TSLA) shares. The sale, which was worth about $1.01 billion, effectively brings Musk to about 60% of his overall goal of selling 10% of his personal TSLA stake.

Musk’s massive TSLA selloff started last month, following a Twitter poll where the CEO asked users of the social media platform if he should sell 10% of his Tesla holdings. Twitter users who voted in favor of the selloff won the poll, and Musk has been offloading TSLA shares since.

@elonmusk sold another 934,091 shares for $1B under his 10b5-1 program filed 9/14/2021, bringing total sales to over 10M shares (59.4% of target). The sales explain why $TSLA acted so badly in an up market day. The use of the 10b5-1 allows him to sell shares even if he has MNPi. pic.twitter.com/9q5GnxTgAy

— Gary Black (@garyblack00) December 3, 2021

Musk has sold 10.1 million shares since he started selling his TSLA stock last month. But at the same time, the Tesla CEO has also exercised options to buy 10.7 million shares. As noted in a Reuters report, Musk still has an option to purchase 10 million more shares at $6.24 each, which expires in August next year.

Elon Musk’s big TSLA selloff seemed to be partly in response to the constant criticism of his net worth, which has grown considerably over the past year. With Musk taking his place as the richest person in the world by net worth, critics such as US Senator Bernie Sanders and former Secretary of Labor Robert Reich have frequently alleged that the CEO was trying to avoid paying taxes.

A careful observer would note that my (low basis) share sale rate significantly exceeds my 10b (high basis) option exercise rate, thus closer to tax maximization than minimization.

— Elon Musk (@elonmusk) November 13, 2021

By offloading 10% of his TSLA holdings, Musk is expected to pay about $15 billion in taxes. While this has been largely ignored by the CEO’s critics, Musk has stated last month that he would like politicians such as Sanders to supply an itemized list showing exactly how the $15 billion would be spent. Musk also confirmed on Twitter that he is selling his TSLA stock in such a way for maximum taxation.

Musk may be the world’s richest person by net worth, but the CEO still tends to be quite reactive to his critics. Last year, Musk was also heavily criticized for his net worth, and the CEO responded by selling off all of his homes in California. These include the whimsical Gene Wilder House, which Musk sold to the late actor’s nephew. To make the sale possible, Musk financed 95% of the house’s selling price. The CEO currently lives in a humble house in Starbase, Texas, where SpaceX is building its Starship facility.

Disclaimer: I am long TSLA.

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Elon Musk’s big Tesla (TSLA) selloff is about 60% complete