After the pledge, Musk sells $ 1.1B in Tesla stock to pay taxes

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After pledging on Twitter, Tesla CEO Elon Musk sold about 900,000 shares of the electric carmaker’s stock, earning over $ 1.1 billion that will go towards paying stock option tax obligations.

The sales, disclosed in two regulatory documents at the end of Wednesday, will cover the tax obligations for the stock options granted to Musk in September. He exercised options to purchase just over 2.1 million shares for $ 6.24 each. The company’s stock closed Wednesday at $ 1,067.95 per share.

The transactions were “done automatically” as part of a trading plan adopted on September 14 to sell options maturing next year, according to forms filed with the US Securities and Exchange Commission. It was almost two months before he launched the idea of ​​the sale on Twitter.

After the transactions, Musk still owns approximately 170 million Tesla shares.

Musk was Tesla’s largest shareholder in June, with about 17% of the company, according to data provider FactSet. He is the richest person in the world, according to Forbes, with a net worth of around $ 282 billion, most of it in Tesla stock.

Last weekend, Musk said he will sell 10% of his stakes in the company, worth more than $ 20 billion, based on the results of a Twitter poll. The sales tweets caused the stock to sell off on Monday and Tuesday, but recovered some on Wednesday. The shares were up 2.6% to $ 1,096 during Wednesday’s extended trading and are up more than 50% this year.

Wedbush analyst Daniel Ives said it looks like Musk will start selling stock at the end of the year. “The question for investors will be whether he will sell his entire 10% ownership stake in the coming months or if he will do so piece by piece during 2022,” Ives wrote in a note to investors.

“There has been a lot of talk lately about unrealized gains as a means of tax avoidance, so I propose to sell 10% of my Tesla stock,” he tweeted Saturday afternoon. “Do you support this?”

Tesla does not pay Musk a cash salary, but he has received huge stock options. “I only have shares, so the only way to pay taxes personally is to sell shares,” Musk tweeted.

Tesla Inc. is headquartered in Palo Alto, California, although Musk has announced that it will move its headquarters to Texas.

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