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.
Renowned investor Ron Baron, founder and CEO of Baron Capital, has once again demonstrated his unwavering faith in Elon Musk’s ventures.
Just after SpaceX’s record-breaking IPO, Baron announced he purchased an additional $1 billion in SpaceX (NASDAQ: SPCX) shares. This move pushes Baron Capital’s total holdings in the company to a staggering $25 billion in market value, underscoring one of the most successful private-to-public investment stories in recent history.
Baron’s relationship with SpaceX dates back to 2017, when his firm began investing approximately $1.75–2 billion through secondary markets and employee tender offers at valuations around $20–22 billion.
By the time of the IPO, which valued SpaceX at over $2 trillion with shares closing near $161, those early stakes had generated more than $13 billion in unrealized gains. Post-IPO, Baron’s position ballooned further, reflecting the company’s meteoric rise driven by reusable rocketry, Starlink’s global satellite internet constellation, Starshield defense applications, and ambitious plans for orbital infrastructure.
In a recent interview, Baron articulated his bullish outlook with characteristic enthusiasm.
Ron Baron said today that he bought $1 billion of @SpaceX IPO shares last Friday, and said that all of Baron Capital’s $SPCX holdings are now worth $25 billion.
“I think we’re going to make hundreds of billions of dollars; If you read the prospectus, you realize what they… pic.twitter.com/U8F471KtJS
— Sawyer Merritt (@SawyerMerritt) June 15, 2026
“I think we’re going to make hundreds of billions of dollars,” he stated, emphasizing that SpaceX’s achievements in rocketry and satellite technology are “not possible for anyone else to accomplish.” He envisions the company as a cornerstone of humanity’s multi-planetary future, potentially reaching valuations of $10–30 trillion within 10–15 years.
Baron has repeatedly affirmed he has no plans to sell, viewing SpaceX as a “lifetime investment” alongside Tesla.
Tesla bull Ron Baron reveals $100M SpaceX investment, sees 3-5x return on TSLA
This conviction stems from SpaceX’s unparalleled execution. The company has revolutionized access to space with Falcon 9 reusability, deployed thousands of Starlink satellites, and is advancing Starship for Mars missions and point-to-point Earth transport.
Baron highlights emerging opportunities like space-based AI data centers and direct-to-cell satellite connectivity, positioning SpaceX at the forefront of a new space economy projected to generate trillions in value.
Critics may question the lofty projections amid high valuations and execution risks, but Baron’s track record speaks volumes. His Tesla holdings, initiated in the mid-2010s, have also delivered outsized returns. As one of the largest institutional holders of SpaceX pre-IPO, Baron Capital’s funds, such as Baron Partners, benefited immensely from valuation markups.
Baron’s $1 billion IPO purchase signals deep confidence in SpaceX’s post-IPO trajectory. In an era of short-term market noise, his strategy exemplifies patient capital: backing visionary leadership and transformative technology.
For investors watching the space sector, it serves as a powerful endorsement that the final frontier may indeed yield the next great wealth-creation engine. As Baron puts it, SpaceX isn’t just building rockets—it’s trying to “save humanity” by expanding our horizons beyond Earth.
Elon Musk
SpaceX (SPCX) IPO is live today at $135: Here’s exactly what you need to know
SpaceX priced its historic IPO at $135 per share today, raising a record $75 billion.
SpaceX officially priced its initial public offering at $135 per share, offering 555,555,555 shares of Class A common stock and raising $75 billion in what is the largest IPO in stock market history. Shares are set to begin trading on the Nasdaq Global Select Market on Friday, June 12, under the ticker symbol SPCX. The previous record holder was Saudi Aramco’s 2019 offering at $29 billion, followed by Alibaba’s $22 billion offering in 2014.
At $135 per share and roughly 555.6 million shares, the implied valuation sits near $1.75 trillion, which would make SpaceX roughly the seventh largest company in the United States, just above Tesla’s current market cap. Regular investors can request shares at the IPO price through Robinhood, Fidelity, Charles Schwab, SoFi, and E*TRADE, though the deal is heavily oversubscribed and most retail allocations will be partial or unfilled. Once trading opens June 12, anyone with a brokerage account can buy SPCX on the open market.
SpaceX’s amended S-1 is sparking a major Tesla merger conversation
The valuation is anchored primarily by Starlink. Starlink crossed 10 million subscribers as of February 2026 and is adding 750,000 to 1.5 million new users per month, with the connectivity segment already posting a $1.19 billion profit last quarter. The offering also bundles in xAI following SpaceX’s all-stock merger earlier this year, adding Grok and the Colossus supercomputer to the investment thesis. As Teslarati reported, Starlink ended 2025 with $10 billion in revenue, a figure analysts project could reach $24 billion by end of 2026.
Wedbush analyst Dan Ives has been vocal in his support. “I think the time is right,” Ives said, adding that the offering expands the Elon Musk ecosystem rather than competing with Tesla. An average 12-month price target of $165 per share represents roughly 22% upside from the IPO price. Not everyone agrees – Motley Fool noted xAI is spending $1 billion per month playing catch-up to OpenAI and Anthropic.
Musk founded SpaceX in 2002 with a single stated purpose. “Elon founded SpaceX with a goal to change humanity, to make us a multi-planet species,” CFO Bret Johnsen said in the company’s retail roadshow video this week. Musk himself has been more direct: “We are building the systems and technologies necessary to provide global connectivity on Earth and beyond, to understand the true nature of the universe, and to extend the light of consciousness to the stars.”
Investor's Corner
Tesla unfolded its first European “folding Supercharger”
Tesla’s folding Supercharger just arrived in Europe and it changes how fast charging expands.
Tesla’s Folding Unit Supercharger has officially landed in Europe, with the company teasing a new installation in its effort for a broader rollout targeting major motorway rest stops across the European continent in Q3 2026. The arrival marks a notable shift in how Tesla is thinking about network expansion, moving from hardware performance alone to engineering the logistics chain itself.
While Tesla did not reveal the exact location for the new folding Supercharger in Europe, the photo shared on X heavily suggests that this maybe somewhere in Norway. Historically, whenever Tesla rolls out an entirely new infrastructure architecture in Europe, whether it was the original Supercharger stalls years ago or these brand-new modular V4 “Folding Units”, Norway is almost always the designated launch pad because of its unmatched EV adoption rate and supportive infrastructure
The Folding Unit, introduced in March 2026, is a factory pre-assembled V4 charging station built on an industrial hinge system mounted to a heavy-duty concrete base. The entire assembly arrives on site ready to unfold and connect. Tesla confirmed the units feature telescopic light poles specifically designed for easy transportation and fast on-site deployment, a detail that signals how carefully the logistics chain has been engineered alongside the hardware itself. The design allows 33% more stalls per delivery truck, cuts installation time roughly in half, and reduces overall deployment costs by more than 20% compared to traditional installations.
Tesla’s newest “Folding V4 Superchargers” are key to its most aggressive expansion yet
Tesla also noted telescopic light poles which provide benefits over traditional Supercharger installations that require fixed-height poles that are awkward to ship, slow to position on site, and often require separate crews and equipment to erect before charging hardware can even be staged. By engineering poles that compress for transit and extend on arrival, Tesla has removed one of the quieter bottlenecks in the physical deployment process. Every hour saved on a light pole installation is an hour redirected toward getting stalls energized. At scale, across dozens of new sites per quarter, those hours add up to a meaningful acceleration in how quickly a location goes from approved permit to serving its first customer.
Each Folding Unit pairs a single V4 power cabinet with eight charging posts. The V4 cabinet delivers up to 500 kW per stall for passenger vehicles and up to 1.2 MW for the Tesla Semi, supporting twice the stalls per cabinet at three times the power density of its predecessor. Longer cables make every new station immediately usable by non-Tesla vehicles, a priority as Tesla continues opening its network to Ford, GM, Rivian, Hyundai, Stellantis, and others.
As Teslarati reported when the Folding Unit was first unveiled, Tesla’s Gigafactory New York produced its final V3 Supercharger cabinet in March 2026 after more than seven years and 15,000 units, completing a full pivot to V4 production. The European arrival of the folding design is the next chapter in that transition.
Faster and cheaper deployment means Tesla can justify building in markets and corridors that were previously too expensive to serve, filling the coverage gaps that have slowed EV adoption outside major urban centers.
First Folding Unit Superchargers in Europe 🇪🇺 https://t.co/KNfYWJukkL pic.twitter.com/YR1udIpH1i
— Tesla Charging (@TeslaCharging) June 10, 2026
Tesla Cybercab specs revealed: range, curb weight, range ratings, and more
Tesla Cybercab snags huge regulatory green light that readies it for public roads
