SpaceX proprietor and Tesla CEO Elon Musk involves the crimson carpet for the Axel Springer Award 2020 in Berlin on December 1st, 2020.
Britta Pedersen | Getty Photos
Elon Musk’s sale of $ 906 million in Tesla shares on Monday brings him one step nearer to his final promoting aim. The massive query: what’s the aim?
In keeping with his November Twitter ballot, Musk plans to promote 10% of all of his Tesla shares. On the time, he owned simply over 170 million shares, so theoretically he plans to promote round 17 million shares to satisfy his Twitter promise.
As of Tuesday morning, he had bought a complete of 11.9 million shares, in keeping with InsiderScore / Verity. Gross sales are unfold throughout a staggering 680 gross sales for a complete of roughly $ 12.7 billion. Primarily based on his 10% goal, he would possible promote one other 5 million shares – which might be greater than $ 4.8 billion at Monday’s closing worth of round $ 966.
Ultimately, nonetheless, it could possibly be extra. Musk makes two varieties of inventory gross sales – one to pay tax on its compensation bundle and the opposite for direct payouts or “to-pocket” gross sales.
The primary motive for promoting Musk is to pay the taxes on the train of choices that expire subsequent summer season. As a part of a 2012 compensation bundle, Tesla’s CEO acquired choices on 22.8 million shares that expire subsequent August. The choices have been valued at greater than $ 28 billion when Musk began promoting shares, that means his tax burden would have been as much as $ 15 billion.
The inventory has fallen over 20% since then, together with its tax invoice. In keeping with InsiderScore / Verity, Musk bought 6.5 million shares to cowl taxes on roughly 15 million choices. To train all of his choices – which is probably going since their expiry leaves billions on the desk – Musk will possible train one other 7.8 million choices and promote an equal of $ 4 billion or extra to pay taxes.
From a tax perspective, he is prone to have 4 or 5 block gross sales of 934,000 shares (the quantity bought on every of the newest tax-related gross sales) earlier than he is executed for the 12 months.
The massive unknown is what number of further shares he might promote for money or “to-pocket” proceeds. Up to now, he has bought round 5.4 million shares for money, no matter whether or not he workouts choices or taxes. If all of his gross sales are tax-related any further, he solely has $ 4 billion extra to promote. Nevertheless, if he continues to promote for money – to fund House-X or different companies – the quantity might rise.
Primarily based on his aim of 10%, Musk will possible solely promote a further $ 5 billion earlier than the top of the 12 months. Nevertheless, if he has different money plans or wants, gross sales might go up even additional.