Tesla (TSLA) CEO Offloads More Shares, Concludes Trading Plan

Tesla (NASDAQ:TSLA)’s TSLA CEO Elon Musk yesterday offloaded another $1.02 billion of his holdings in the company. This brings him close to his stated goal of reducing his stake in the electric vehicle (EV) maker by 10%.

Per a filing with the U.S. Securities & Exchange Commission, the billionaire exercised an option yesterday to buy 1.6 million shares of Tesla and sold 934,090 shares for $1.02 billion to pay for taxes associated with the option exercise.

All this kicked off in November when Musk left Twitterati open-mouthed with a bizarre poll asking his followers to vote whether he should sell 10% of his stock. The tweet read: “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.” He added, “I will abide by the results of this poll, whichever way it goes.”

With the majority of his followers voting in favor of the stock sale, Musk abided by his promise by starting to offload his Tesla holdings. Simultaneously, he was exercising his stock options to buy fresh shares.

To deliver on his pledge of selling 10% stock, Musk needs to dispose of about 17 million shares, assuming his target excludes exercisable options. On Dec 22, Musk took to social media to state that he is almost done trimming his Tesla holdings. He added, "There are still a few tranches left, but almost done."

The latest transaction takes Musk’s total sales to about 15.6 million shares for approximately $16.4 billion.

It is not clear whether the poll in November had any actual influence on Musk’s plans. He had stated months earlier that he was likely to exercise a big chunk of stock options toward the end of the year. In September, much before his tweet, he had also set up a trading plan under Rule 10b5-1 related to his options-related sales.

Per Reuters, with the latest sale, Musk has exercised all of the options to buy 22.86 million stocks, which are set to expire next year. This marks the completion of the Rule 10b5-1 trading plan as well.

Zacks Rank & Other Key Picks

Tesla currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other stocks in the auto space that investors can consider are Goodyear Tire GT, LCI Industries (NYSE:LCII) LCII and LKQ (NASDAQ:LKQ) Corporation LKQ. While Goodyear Tire and LCI Industries flaunt a Zacks Rank of 1, LKQ Corp carries a Zacks Rank of 2 (Buy).

Goodyear has an expected earnings growth rate of 196.86% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 80 cents in the past 90 days.

Goodyear’s earnings beat the Zacks Consensus Estimate in the last four quarters. GT has a trailing four-quarter earnings surprise of 228.45%, on average. GT has surged 100.6% in the past year.

LCI Industries has an expected earnings growth rate of 67.95% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 45 cents in the past 60 days.

LCI Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing once. LCII has a trailing four-quarter earnings surprise of 10.09%, on average. LCI has rallied 15.2% in the past year.

LKQ Corp has an expected earnings growth rate of 51.76% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 9 cents in the last 60 days.

LKQ Corp’s earnings beat the Zacks Consensus Estimate in the last four quarters. LKQ has a trailing four-quarter earnings surprise of 34.37%, on average. LKQ has rallied 66.3% in the past year.

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