Investor's Corner
Debunking the story that Elon Musk “kept cash” from the recent stock offering
On Monday May 23, 2016, Tesla Motors e-mailed to TSLA registered investors a link to Elon Musk’s Form 4 SEC Filing, a.k.a. the Statement of Changes in Beneficial Ownership, detailing the transactions that are part of the recent stock offering that relate to Elon Musk.
Source: Tesla Motors
The Form is available also at Tesla Motors Investors website.
I will go through the major details shown in the form to understand how the transactions were executed. For the inquiring minds, the various SEC codes listed in FORM 4 can be found here.
First an assumption: prior to the offering and the changes in beneficial ownership of the listed securities, Elon Musk held 29,579,342 shares of stock in TSLA.
The first and second transactions (Table I, column 1, line 1 and 2) report the exercise of stock options (options that were awarded to Elon in previous years as part of a Non-Qualified Stock Options plan) to acquire 5,503,972 shares of Tesla’s common stock (2,147,986 + 3,355,986 shares). The options were originally awarded at $6.63, and Elon paid $36,491,334 or about $36 million to exercise them. After this purchase, Elon owned at total of 35,083,314 shares (Table I, column 5, line 2).
While the original offering was supposed to be priced at about $204 per share, the eventual offering price was raised to $215 per share. At the $215 stock value at the time of the offering, the value of the acquired shares was a whopping $1.18 billion!
Before actually paying for the option exercise transactions, Elon did two things.
First it disposed of 1.2 million shares as a “bona file gift to charity” (Table I, line 3 and Explanation of Responses (3)). This gift reduced Elon’s shares down to 33,883,314 shares (Table I, column 5, line 3).
Second, Elon disclosed that he intended to sell 2,782,670 of the purchased shares in the “registered offering solely in order to pay income tax related to these stock option exercises” (see Explanation of Responses (2) in FORM 4). The sale reduced Elon’s shares further down to 31,100,644 shares. At $215 / share, Elon Musk’s Tesla shares are worth a bit over $13 billion.
Interestingly, if these were Incentive Stock Options (ISO), the ones usually awarded to Executives, vs. Non-qualified Stock Options (NSO), usually awarded to regular employees, these options would have received special federal tax treatment, and there would be no taxable event reported at exercise, except for any exercised shares that were sold immediately after the exercise. But as one can see in Table II, Elon received “non-qualified stock options” like any other employee, that do not qualify for special tax treatment.
The gain or “bargain element” in a stock option exercise is calculated by subtracting the exercise price ($6.63) from the market price ($215) of the company stock on the date the option is exercised. So the gain per share is $208.70. The total bargain element (gain) in the options exercise transactions is $1,148,679,000 or about $1.14 billion, which is the “taxable gain.”
For the 2,782,670 shares that Elon sold in the registered offering, Elon collected $598,274,050 or about $580 million after accounting for the price paid for the shares. Since these shares were sold immediately after exercise, the gain will be reported as a short-term capital gain and will be subject to tax at ordinary income tax rates. Assuming 39.6% ordinary federal income tax rate, and a 12.30% top individual rate for California, Elon would have to pay $596 million in tax, or 51.9% of the “taxable gain.”
Notice that the $580 and $596 million numbers above are close enough for the company to state in the FORM 8-K filing that “Mr. Musk will owe a significant amount of taxes from exercising these stock options and will fund this task obligation by selling only the amount of shares needed to do so.”
But we are not done. The rest of the stock exercised by Elon Musk, 2,731,302 shares, can be treated as long-term capital gain (with better tax treatment, likely at the 20% long-term capital gain rate, rather than at the 39.6% personal income tax rate) if the stock is held for 12 months after exercise. Assuming that Elon is smart (I think he is), he will wait, to get a combined Federal + California 32.3% tax rate, resulting in an additional $184 million in taxes (2,731,302 times $208.70 times 32.3%).
Finally, we need to consider the gift of 1.2 million shares of Tesla’s common stock given to charity (Table I, column 1, line 3). By donating shares, Elon avoids paying the capital gains tax, which would have to be paid if the shares were first sold and then the cash proceeds donated to charity.
Moreover, Elon can get a tax deduction for the current fair market value of the gifted shares. In general, the amount of the deduction is limited to 20%-30% of the adjusted gross income, but one can carry forward amounts above that for up to five years. Without knowing Elon’s adjusted gross income, it is difficult to guess what the deduction would amount to. The fair market value of the donated shares is $250 million. That would be the best case scenario for a charitable deduction, which is extremely unlikely, while 20% of the taxable gain is more likely ($218 million).
Summarizing the transactions:
- Cost of exercising options: $36 million
- Taxes on short-term capital gain for shares sold at offering: $596 million
- Taxes on long-term capital gains for shares held 12-months: $184 million
Total outlay: $ 816 million
- Registered offering sale: $580 million
- Gifted shares tax deduction (max): $250 million, (likely): $218 million
So after all is said and done, Elon will still owe Uncle Sam between $18 and $236 million. I have seen reports from “TSLA bears” (or TSLA haters, same thing) indicating that Elon would actually “keep cash” on this sale.
Obviously he does not, and I would expect that he would eventually have to sell a portion of the remaining $1.5 million (to be exact 1,521,302 shares) from the offering that Elon is not selling or donating to charity, to cover the additional tax, unless he’s got cash in the bank to pay for it.
This offering dilutes the total outstanding shares of TSLA with an additional 1.4 million from Tesla Motors and the 5.5 million from Elon Musk (for a total on 6.9 million new shares diluting the TSLA public pool of shares), while Elon adds about 1.5 million to his total, ending with about 31 million shares (to be exact 31,100,644). So Elon adds some shares but loses a bit in Tesla ownership percentage, from 26.2% to 22.7%.
Technical Analysis
Looking at this week TSLA action, we are now after my predicted breakout, looking at bullish pay-day-cycles (6 consecutive green Heikin Ashi bars), the MACD gone positive, and the MACD moving averages “crossed to the bulls”.
Source: Wall Street I/O
We are coming close to an important point: the stock price is advancing toward the 200-day moving average (around $221.90), which will act as “resistance”. If the stock fails to cross the 200-day moving average, it would usually move down and fast afterwards (“bounce” off the average); this morning it traded as high as $220.75 and “bounced”. If otherwise it eventually crosses the 200-day moving average, we will have an additional bullish indicator and the stock will be header for new tops.
I entered my option trades last week (Sept. 215 calls), before the breakout and have added and cashed in already once to take profits. I have also progressively moved up my conditional stop from 205, to 210 and 215, to protect my profits, and will likely move it even higher as the stock approaches the 221 level and tests the resistance. If the stock crosses the 200-day moving average, I will add again to my TSLA calls holdings, as I will have 4 bullish indicators flying high. Obviously not a good time for short sellers in $TSLA.
Investor's Corner
Tesla reports Q1 deliveries, missing expectations slightly
The figure, however, fell short of Wall Street’s consensus estimate of 365,645 units, reflecting ongoing headwinds in the global EV market.
Tesla reported deliveries for the first quarter of 2026 today, missing expectations set by Wall Street analysts slightly as the company aims to have a massive year in terms of sales, along with other projects.
Tesla delivered 358,023 vehicles in the first quarter of 2026, marking a 6.3 percent increase from 336,681 vehicles in Q1 2025.
The figure, however, fell short of Wall Street’s consensus estimate of 365,645 units, reflecting ongoing headwinds in the global EV market. Production reached approximately 362,000 vehicles, with Model 3 and Model Y accounting for the vast majority. The results come as Tesla navigates softening demand, intensifying competition in China and Europe, and the expiration of key U.S. federal tax incentives.
🚨 BREAKING: Tesla delivered 358,023 vehicles in Q1 2026
Tesla also reported record energy deployments of 8.8 GWh
Wall Street had delivery consensus estimates of 365,645 pic.twitter.com/EVNAu5L3UT
— TESLARATI (@Teslarati) April 2, 2026
Energy storage deployments provided a bright spot, hitting a record 8.8 GWh in Q1. This underscores the accelerating momentum in Tesla’s energy segment, which has become a critical growth driver even as automotive volumes stabilize.
Year-over-year, the energy business continues to outpace vehicle sales, with analysts noting strong backlog demand for Megapack systems amid rising grid-scale needs for renewables and AI data centers.
Looking ahead, analysts project full-year 2026 vehicle deliveries in the range of 1.69 million units—a modest 3-5% rise from roughly 1.64 million in 2025.
Growth is expected to accelerate in the second half as production ramps and new incentives emerge in select markets. However, risks remain: persistent high interest rates, price competition from legacy automakers and Chinese EV makers, and potential margin pressure could cap upside.
Tesla has not issued official full-year guidance, but executives have signaled confidence in sequential quarterly improvements driven by cost reductions and refreshed lineups.
By the end of 2026, Tesla plans several major product launches to reignite momentum. The refreshed Model Y, including a new 7-seater variant already rolling out in select markets, is expected to boost family-oriented sales with updated styling, efficiency gains, and interior enhancements.
Autonomous ambitions remain central to Tesla’s mission, and that’s where the vast majority of the attention has been put. Volume production of the Cybercab (Robotaxi) is targeted to begin ramping in 2026, potentially unlocking new revenue streams through unsupervised Full Self-Driving (FSD) deployment.
A next-generation affordable EV platform, possibly under $30,000, is also in advanced planning stages for 2026 or 2027 introduction. On the energy front, the Megapack 3 and larger Megablock systems will drive further deployment scale.
While Q1 highlights transitional challenges in autos, Tesla’s diversified roadmap, spanning refreshed consumer vehicles, commercial trucks, Robotaxis, and explosive energy growth, positions the company for a stronger second half and beyond. Investors will watch Q2 closely for signs of sustained recovery, especially with new vehicles potentially on the horizon.
Elon Musk
Elon Musk debunks latest rumors about SpaceX IPO
Musk has swiftly put to rest circulating reports suggesting that SpaceX would exclude popular retail brokerages Robinhood and SoFi from its highly anticipated initial public offering. In a direct response posted on X on March 31, Musk stated simply, “These reports are false,” addressing widespread speculation fueled by a Reuters article.
Tesla and SpaceX CEO Elon Musk debunked the latest rumors about the space exploration company’s initial public offering (IPO), which has been the subject of a wide array of speculation over the last few weeks.
With SpaceX likely heading to Wall Street to become a publicly-traded stock in the coming months, there is a lot of speculation surrounding how it will happen, whether the company will potentially combine with Tesla, and more.
Tesla and SpaceX to merge in 2027, Wall Street analyst predicts
But the latest rumors have to do with where SpaceX will list the stock.
Musk has swiftly put to rest circulating reports suggesting that SpaceX would exclude popular retail brokerages Robinhood and SoFi from its highly anticipated initial public offering.
In a direct response posted on X on March 31, Musk stated simply, “These reports are false,” addressing widespread speculation fueled by a Reuters article.
These reports are false
— Elon Musk (@elonmusk) March 31, 2026
The Reuters report, published March 30, claimed that Morgan Stanley’s E*Trade was in talks to lead the sale of SpaceX shares to small U.S. investors.
Sources indicated that Robinhood and SoFi, despite pitching for roles, faced potential exclusion from the retail allocation, with Fidelity also competing for a piece of the action. The story quickly spread across financial media, raising concerns among retail investors eager to participate in what could be one of the largest IPOs in history.
SpaceX has a reported valuation nearing $1.75 trillion, and Musk’s plan to allocate up to 30 percent of shares to individual investors — far above the typical 5-10% — had generated massive excitement.
Musk’s concise denial immediately calmed the narrative. The original X post quoting the rumor garnered significant engagement, with users expressing relief that everyday investors would not be sidelined.
This episode reflects Musk’s hands-on approach to SpaceX’s public debut.
Earlier reporting revealed plans for an unusually large retail slice to leverage Musk’s dedicated fan base and stabilize post-IPO trading. SpaceX aims to file potentially as early as this period, building on momentum from its Starship program and Starlink growth.
The IPO could mark a transformative moment, potentially elevating Musk’s status further while democratizing access to a company long reserved for accredited investors and institutions.
The rumor’s quick debunking also revives debates about retail access in high-profile listings. Robinhood gained popularity during the 2021 meme-stock surge but faced criticism for past trading restrictions.
SoFi has positioned itself as a modern financial platform for younger investors. Excluding them could have limited participation from tech-savvy retail traders who form a core part of Musk’s supporter base across Tesla and SpaceX.
While details remain fluid, Musk’s intervention reinforces commitment to broad accessibility. As preparations advance, investors await official filings. For now, the message is clear: rumors of restricted retail access were overstated, keeping the door open for widespread participation in SpaceX’s public chapter.
This development comes amid broader market enthusiasm for space and technology stocks. Musk’s transparency through X continues to shape public perception, distinguishing SpaceX’s path from traditional Wall Street norms. With retail allocation potentially reaching 30 percent, the IPO promises to be both commercially massive and culturally significant.
Investor's Corner
Tesla and SpaceX to merge in 2027, Wall Street analyst predicts
The move, Ives argues, is no longer a distant possibility but a logical next step, fueled by deepening operational ties, shared AI ambitions, and Elon Musk’s vision for dominating the next era of technology.
Tesla and SpaceX are two of Elon Musk’s most popular and notable companies, but a new note from one Wall Street analyst claims the two companies will become one sometime next year, as 2027 could see the dawn of a new horizon.
In a bold new research note, Wedbush analyst Dan Ives has reaffirmed his long-standing prediction: Tesla and SpaceX will merge in 2027.
The move, Ives argues, is no longer a distant possibility but a logical next step, fueled by deepening operational ties, shared AI ambitions, and Elon Musk’s vision for dominating the next era of technology.
He writes:
“Still Expect Tesla and SpaceX to Merge in 2027. We continue to believe that SpaceX and Tesla will eventually merge into one company in 2027 with the groundwork already in place for both operations to become one organization. Tesla already owns a stake in SpaceX after the company’s $2 billion investment in xAI got converted to SpaceX shares following SpaceX’s acquisition of xAI earlier this year initially tying both of Musk’s ventures closer together but still represents <1% of SpaceX’s expected valuation. The recent announcement of a joint Terafab facility between SpaceX and Tesla further ties both operations together making it more feasible to merge operations given the now existing overlap being built out across the two with this the first step.”
The groundwork is already being laid. Earlier this year, SpaceX acquired xAI, converting Tesla’s $2 billion investment in the AI startup into a small equity stake, less than 1 percent, in SpaceX.
Regulatory filings cleared the transaction in March 2026, formally linking the two Musk-led companies financially for the first time. Then came the announcement of a joint TERAFAB facility in Austin, Texas: two advanced chip factories, one dedicated to Tesla’s AI needs for vehicles and Optimus robots, the other targeting space-based data centers.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
Ives calls Terafab the “first step” toward full operational integration.
SpaceX’s impending IPO, expected as soon as mid-June 2026, will turbocharge these plans. The company aims to raise approximately $75 billion at a roughly $1.75 trillion valuation, far exceeding earlier estimates.
Proceeds will fund Starship rocket flights, a NASA-contracted lunar base, expanded Starlink services across maritime, aviation, and direct-to-mobile applications, and crucially, orbital AI infrastructure
A major driver is the exploding demand for AI compute. U.S. data centers are projected to consume 470 TWh of electricity by 2030, constrained by power grids and land.
🚨 Wedbush’s Dan Ives says that Tesla and SpaceX will merge in 2027. SpaceX will IPO soon, his new note says:
“According to media reports, SpaceX could file a prospectus for an IPO imminently with the goal of raising ~$75 billion above the prior expectation of ~$50 billion…
— TESLARATI (@Teslarati) March 27, 2026
SpaceX’s strategy, launching millions of solar-powered satellites to host data centers in orbit, bypasses Earth’s energy bottlenecks. Solar energy captured in space avoids atmospheric losses and day-night cycles, offering a scalable solution for AI training and inference.
The xAI acquisition ties directly into this vision, positioning the combined entity as a leader in extraterrestrial computing.
The merger would create a formidable conglomerate spanning electric vehicles, robotics, satellite communications, human spaceflight, and defense.
Ives highlights SpaceX’s role in the Trump administration’s “Golden Dome” missile defense shield, which would leverage Starlink satellites for tracking.
For Tesla, access to SpaceX’s launch cadence and orbital assets could accelerate autonomous driving, Robotaxi fleets, and Optimus deployment.
Musk, who has signaled his desire to own roughly 25 percent of Tesla to steer its AI future, views the combination as essential to overcoming fragmented regulatory scrutiny from the FTC and DOJ.
Challenges remain. Antitrust hurdles could delay or reshape the deal, and shareholder approvals on both sides would be required. Yet Ives remains bullish, maintaining an Outperform rating on Tesla with a $600 price target, implying substantial upside from current levels. The analyst sees the merger as the “holy grail” for consolidating Musk’s disruptive tech empire.
If realized, a 2027 Tesla-SpaceX union would not only reshape corporate boundaries but redefine humanity’s trajectory in AI and space exploration. It would mark the moment two pioneering companies become one unstoppable force, pushing the limits of what’s possible on Earth and beyond.
Tesla reports Q1 deliveries, missing expectations slightly
NASA sends humans to the Moon for the first time since 1972 – Here’s what’s next
Tesla removes Model S and X custom orders as sunset officially begins
Elon Musk says Tesla is developing a new vehicle: ‘Way cooler than a minivan’
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
