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Tesla's Musk exercises all of his stock options expiring next year

Stock MarketsDec 29, 2021 02:31PM ET
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2/2 © Reuters. FILE PHOTO: Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song/File Photo 2/2

By Hyunjoo Jin

SAN FRANCISCO (Reuters) -Tesla Inc Chief Executive Elon Musk has exercised all of his options expiring next year, signaling an end to his stock sales which triggered a fall in the share price of the world's most valuable carmaker.

He has sold $16.4 billion worth of shares since early November when he said he would sell 10% of his Tesla (NASDAQ:TSLA) stock if Twitter (NYSE:TWTR) users agreed. They did.

Musk said last week that he would be done selling shares after his programmed sales ended.

Musk in September set up a prearranged plan for stock sales related to options expiring next year and Tesla in a filing on Tuesday said the program was complete.

The last trades, reported on Tuesday, included exercising an option on 1.6 million shares and selling 934,090 of those shares to pay for taxes.

In total, Musk has sold 15.7 million shares in Tesla late in this year, approximately the 10% stake the billionaire had pledged to sell.

Tesla shares lost about a quarter of their value after Musk in November asked his Twitter followers if he should sell 10% of his holdings. They rebounded last week when he said he was almost done with stock sales, although the shares are still below the record closing high of $1,229.91 in November.

Tesla shares were trading down 1.1% to $1,077.03 each on Wednesday.

Two days before Musk's Twitter poll, Tesla shares hit a record high, extending gains sparked by an order for Tesla cars from rental company Hertz.

SURTAX

In 2012, Musk was granted the stock options that vested when Tesla achieved specific milestones on market capitalization and other goals. He did not have to pay taxes on the vested options until he exercised most of them since November.

He exercised options to buy nearly 23 million shares at $6.24 each, a fraction of Tesla's share price.

Democrats, who control Congress, have proposed a surtax on income taxes and capital gains taxes that may take effect next year.

"Exercising the options in 2021 would avoid the increased taxes next year," Steve Rosenthal, a senior fellow in the Urban-Brookings Tax Policy Center, said.

Tesla did not respond to a Reuters request for comment.

Musk, the world's richest person with a net worth of $276 billion according to Forbes, said he would pay more than $11 billion in taxes this year.

Musk has moved from California to Texas, where there is no state income tax.

He initially said his sale of 10% of his stock was in response to criticism that wealthy people avoid taxes.

He recently suggested that he needed to sell some of the stocks regardless of the Twitter poll, to pay taxes associated with his options exercise.

"I have some Tesla options that are expiring next year so I needed to exercise those options no matter what," he said in an interview with conservative satirical website Babylon Bee.

He added that he sold additional stocks to "try to get up to the 10% level."

Tesla's Musk exercises all of his stock options expiring next year
 

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Comments (7)
Me comment
Me comment Dec 29, 2021 5:15PM ET
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Sold 15.9 million shares but exercised option to get 23 million shares so net shares increased 7.1 million shares. Musk's actual ownership increSed
Rajiv Gupta
Rajiv Gupta Dec 29, 2021 5:15PM ET
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He already indirectly owned those shares via deep ITM options for years. Nothing changed intrinsically. The tax related sale net reduced his exposure to TSLA, the exercise of options didnt increase his exposure.
Mike Brarey
Mike Brarey Dec 29, 2021 3:24AM ET
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talented capital allocator devests from overvalued asset
Ron Love
Ron Love Dec 29, 2021 3:24AM ET
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Divests by adding 7.2M shares in the company? 🤣🤣🤣
Fabrizio Fusaro
Fabrizio Fusaro Dec 29, 2021 3:24AM ET
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Ron Love he devested 5billions more then those needed to pay taxes. Do you think after doing grocery something will left? He just sold because he knows about the bubble and creating mess withthe pool and *******will frenzy the option market and squeeze some short that is the only reason why tesla is not at 80$ thst is actually its fair price
Marcus Bennett
Marcus Bennett Dec 29, 2021 2:04AM ET
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Elon musk consider investing into small African Indigenous communities.. This would be great for developing more solar powered building plan for long time investments. #Elonmusk #Prestons #solarenergy
Ricardo Diogo
Rcd72 Dec 29, 2021 2:03AM ET
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flock of sheep 🐑🐑🐑🐑🐑
Wilks Campbell
Wilks Campbell Dec 29, 2021 12:11AM ET
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Again, it is not an tech company, nor solar or fsd robo taxi company, it might use robo to make car , so as others, Again , it is just a EV car company, nothing more !
Matt Brackley
Matt Brackley Dec 29, 2021 12:11AM ET
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nationalized just like in china
Dec 29, 2021 12:11AM ET
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Its a real metaverse … smart phones on the roll
Wilks Campbell
Wilks Campbell Dec 29, 2021 12:09AM ET
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The stock master already told you the price cap. You still asking ! Dont blame Elon if you loss any money by buyingTSLA over price range of $900 to $1000.
Sattar Langary
Sattar Langary Dec 28, 2021 10:44PM ET
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What does it mean for Tesla stock tomorrow?
 
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