Investor's Corner

Tesla’s Elon Musk exercises all of his TSLA stock options that will expire in 2022

Credit: The Verge

Tesla (NASDAQ:TSLA) CEO Elon Musk has effectively exercised all of his TSLA options that are poised to expire next year. This may signal an end to Musk’s efforts to offload some of his TSLA holdings, which triggered a fall in the share price of the premier electric vehicle maker. 

Musk noted last week that he would be reaching his target of selling around 10% of his TSLA holdings when the “10b preprogrammed sales complete.” The CEO did not elaborate on his statement, though it was believed that the executive was referring to his options-related stock sales. 

As noted in a Reuters report, with the option exercise on 1.6 million shares on Tuesday, Musk effectively exercised the options on 22.8 million shares that would be expiring in August. Filings also showed that Musk sold 934,090 TSLA shares for $1.02 billion to pay taxes. “This rule 10b5-1 trading plan was completed on December 28, 2021,” Tesla noted on his filings on Tuesday. 

Musk’s massive TSLA stock selloff began last month following a poll on Twitter that asked users of the social media platform if he should offload some of his holdings on the company. The poll ended with the results being overwhelmingly in favor of Musk selling about 10% of his TSLA holdings. 

Unsurprisingly, Musk’s TSLA selloff resulted in blows to the company’s momentum in the market. Tesla shares lost about a quarter of their value after Musk’s November poll. And while TSLA stock has rebounded to $1,088.47 per share as of writing, it remains lower than its record closing high of $1,229.91 posted by the company in November. 

To date, Musk has offloaded about 15.7 million TSLA shares, which is pretty close to the 10% stake he had pledged to sell last month. Out of this 15.7 million shares, 10.3 million were related to the options exercise. The CEO also offloaded an additional 5.4 million shares. This translated to about $16.4 billion worth of TSLA stock sold since early November. 

Musk has stated that he would be paying about $11 billion in taxes this year, thanks in no small part to his TSLA stock selloff. This would effectively make Musk’s tax bill this year one of the largest in the United States’ history. Such an amount translates to about $1 million per day since the Tesla CEO came over to the country to study business and physics at the University of Pennsylvania in 1992 or about $1.5 million per day since he became a US citizen in 2002. 

Disclaimer: I am long TSLA.

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Tesla’s Elon Musk exercises all of his TSLA stock options that will expire in 2022
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