Elon Musk sells $ 5 billion worth of Tesla stock after Twitter poll

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(Bloomberg) – Tesla Inc. chief executive Elon Musk dumped $ 5 billion worth of shares in the electric automaker shortly after holding a Twitter poll on whether to sell 10% of his massive stake in the company.

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The richest person in the world to date sold over 4.5 million shares this week, according to regulatory documents on Wednesday. Those were his first sales in more than five years.

Musk, who posts frequently on Twitter and often engages in controversial topics, created a firestorm over the weekend with the survey on whether to sell part of his Tesla stake – which he linked to a debate over whether ultra-rich are paying their fair share of taxes. The poll, which led to a casting vote for its sale, dropped the automaker’s shares by 16% in two days as investors worried about the consequences of draining such a large block of shares.

On Monday, Musk dumped about $ 1.1 billion worth of stock to pay income taxes on stock options that he also exercised that day, according to two documents. These transactions were carried out on the basis of a pre-trading plan adopted in mid-September.

On Tuesdays and Wednesdays he made the remaining sales. The documents detailing these divestments did not indicate that they were planned in advance.

The documents do not shed light on whether Musk’s Twitter poll at the weekend had any influence on his decision to make some or all of the transactions or whether he will continue to sell until he hits the 10% mark. To get there, it would have to get rid of around 17 million shares, and even more if it also included exercisable options in its total holdings.

The options exercised by Musk came from a large prize he received in 2012. He should have exercised them before next August or they would have expired. Taxes on these transactions are generally covered by the immediate disposal of some of the newly acquired shares. Earlier this year, Musk publicly stated that he would likely exercise the options he earned from the 2012 award in the near future.

Option exercises and related sales may have been performed regardless of the outcome of the Twitter survey, as they were carried out as part of a pre-established plan. But the terms of such plans are not subject to public disclosure, and executives have ample freedom to cancel or change them at any time.

However, the Twitter referendum that grabbed the headlines hit Tesla stock on Monday and Tuesday, wiping out $ 50 billion from Musk’s net worth. Tesla was up 4.3% on Wednesday to close at $ 1,067.95, equalizing losses this week to less than 13%.

After the disclosure of early trading, the stock rose 2.7% in post-market trading. Many of the inquiries came after the end, but Tesla tokens on cryptocurrency exchange FTX fell to around $ 1,049 as of 2:06 pm Thursday in Hong Kong.

The billionaire last sold stock in 2016, when he exercised his options and liquidated some of the newly acquired stock to cover approximately $ 590 million in income taxes.

In his November 6 survey announcement, Musk wrote that “a lot is done further because unrealized gains are a means of tax evasion, so I propose to sell 10% of my Tesla stock.” Almost 58% of the 3.5 million votes were in favor of a sale.

Musk, 50, is the richest person in the world with a fortune of nearly $ 300 billion, according to the Bloomberg Billionaires Index.

(Updates with additional context in the third paragraph and negotiation in the ninth)

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