Elon Musk Tesla Stock: How Did Musk Get 564,000 More Shares After Selling 10.1 Million?

Elon Musk Tesla Stock: How Did Musk Get 564,000 More Shares After Selling 10.1 Million?
Elon Musk Tesla stock sell-off allowed him to buy more Tesla shares of the company while at the same time, selling them. Elon Musk selling Tesla stocks easily is due to his tax obligations. Photo : Pool/Getty Images

Elon Musk, the CEO of Tesla, has sold a large portion of his company in recent weeks.

Despite this disposition, Musk now owns 564,000 more shares of Tesla than he did before the Tesla stock sell-off began.

Tesla Stock

Despite his commitment to following a poll he conducted to his Twitter followers, which asked for him to sell 10% of his Tesla stock, a review of his filings suggested that Musk is sticking to his guns.

The tech CEO sold 10.1 million shares of Tesla so far, falling approximately 7 million short of his target. But he is apparently also buying additional Tesla stocks at the same time he is selling them.

As reported by Yahoo Finance, Elon Musk Tesla stock is selling at a low exercise price of $6.24 per share, less than 1% of Tesla's current stock price. Musk has exercised options to buy 10.7 million Tesla shares since his Twitter poll on November 6.

However, Musk would have done so regardless of the poll, the choices would have expired if Musk didn't use them by August 2022.

Elon Musk Tesla Stock

The founder's Teslas stock selling move is rooted in Musk's tax obligations and not really from his Twitter poll. This is because Musk received options as his major source of remuneration, he is susceptible to a substantial income tax hit whenever he exercises them.

According to CNN, on the new shares he's bought since November 8, he owes nearly $5 billion in federal income taxes. Musk will almost certainly owe state taxes as well and sold Tesla stock specifically to satisfy the tax bill.

Musk also intends to exercise other options that will expire next year. He still has 12.2 million options that are about to expire that he hasn't used.

It is predicted that he will probably sell around 5.3 million of those freshly acquired shares to settle his tax obligation, based on prior experience.

However, he will still have approximately 7 million more shares than he has now.

The Tesla exec is maintaining the majority of the shares he's buying rather than selling them entirely, as previous executives, like Tesla's board chair Robyn Denholm, have been known to do when exercising options.

Musk will have 22.9 million fewer alternatives after he's finished with these soon-to-expire possibilities than he did at the outset of this process.

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More Tesla Stocks For Sale

In the following year, Musk's portfolio of options is anticipated to expand dramatically.

His compensation arrangement was meant to provide him with 12 separate blocks of options if the firm met specified financial and market value benchmarks.

With the corporation being valued at $1 trillion, all of the market value targets have been met, leaving just sales and profit targets to be met.

Tesla has already allocated three additional blocks of 8.4 million options to Musk, for a total of 25.3 new options, more than compensating for those he is now exercising.

According to company documents, meeting the required financial benchmarks is "likely" in the near future.

It is predicted that Elon Musk could qualify for one block of 8.4 million options with fourth-quarter results and two more with first-quarter 2022 results. And, if analyst predictions are true, he may earn another 8.4 million options in the second or third quarter of 2022.

 

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