NEW YORK (BLOOMBERG) – Tesla chief executive Elon Musk exercised 2.15 million stock options in the electric carmaker, and then sold stock, shortly after he held a vote over Twitter asking his followers whether he should sell some of his stock.
Mr Musk on Monday (Nov 8) exercised the options at a price of US$6.24 per contract, according to a regulatory filing on Wednesday. He subsequently sold 934,000 shares to collect a combined US$1.55 billion (S$2.1 billion).
The shares were sold “solely to satisfy the reporting person’s tax withholding obligations related to the exercise of stock options”, the filing said. The contracts, which came from a stock option award Mr Musk received in 2012, were set to expire in August next year.
Tesla closed Wednesday at US$1,067.95 after plunging almost 13 per cent this week.
It is the billionaire’s first sale since 2016, when he last exercised stock options and liquidated some of his newly acquired shares to cover about US$590 million of income taxes.
The sale was prompted by a Nov 6 poll Mr Musk set up on Twitter, saying that “much is made lately of unrealised gains being a means of tax avoidance, so I propose selling 10 per cent of my Tesla stock”. Almost 58 per cent of the 3.5 million votes were cast in favour of a sale.
Mr Musk, 50, is the world’s richest person, with an almost US$300 billion fortune, according to the Bloomberg Billionaires Index. His common shares in Tesla make up about 60 per cent of it. That indicates Mr Musk may carry out additional sales to fulfil his promise.