Elon Musk sells $5 billion in Tesla shares after Twitter poll

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(Businesshala) – Tesla Chief Executive Elon Musk sold nearly $5 billion in shares, the billionaire reported in a filing on Wednesday, just days after he told Twitter users about his 10% stake sale.

FILE PHOTO: Tesla Inc. CEO Elon Musk walks next to a screen showing an image of a Tesla Model 3 car during the opening ceremony of the Tesla China-made Model Y event in Shanghai, China January 7, 2020. Businesshala / Ellie Song / FILE PHOTO

In its first share sale since 2016, Musk’s trust sold approximately 3.6 million shares in Tesla, valued at about $4 billion, while another for $1.1 billion after he exercised options to acquire approximately 2.2 million shares. Sold 934,000 shares.

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According to Forbes, 4.5 million shares are equivalent to about 3% of his total holdings in the electric vehicle maker, which makes up his estimated $281.6 billion in huge share.

Musk told Twitter users here on Saturday that it helped push Tesla’s share price down after a majority of Twitter users said they agreed with the sale.

The stock sank 12% on Tuesday in a multi-day selloff that jeopardized the company’s position in the $1 trillion club, but recovered 4.3% on Wednesday.

The filing said the option-related sale was established in September through a business plan that allows corporate insiders to establish a timely pre-planned transaction. Sale of option-related shares paid for related taxes. It was not clear how the trading plan relates to Musk’s Twitter poll. Tesla did not respond to a request for comment.

The additional share sale was isolated and provided Musk with a sizable stockpile of cash, given that his wealth is largely tied to his stakes in Tesla and SpaceX.

Musk has more than 20 million stock options that are due to expire in August next year.

If Musk executes the 10% stock sale plan, it will be slightly negative in the near term, said Mark Arnold, chief investment officer at Hyperion Asset Management in Brisbane, where Tesla is the top holding in its global fund.

“But the stock is very liquid and it’s not a large percentage of the total issued shares, so it shouldn’t have that much impact … we’re quite comfortable with the outlook for the business,” he said.

While Tesla lost nearly $150 billion in market value this week, retail investors have been net buyers of the stock. Some 58% of Tesla’s trade orders on Fidelity’s brokerage website on Wednesday were for buy rather than sell.

Retail investors netted $157 million on Monday and Tuesday, according to Wanda Research.

Tesla is now up more than 51% in 2021, thanks in large part to an October rally that was driven by an agreement to sell 100,000 vehicles to rental car company Hertz.

“The company itself is under fire, with strong results,” said Tim Grisky, a senior portfolio strategist at New York-based investment management firm Ingalls & Snyder.

Bullish sentiment returned to Tesla’s options on Wednesday, with calls trading around 1.1 for each put. Calls are typically used for bullish trades, whereas buying puts show a bearish bias.

According to a Businesshala analysis of Trade Alert data, the company’s options accounted for about $109 billion in premium changing hands over the past two weeks, or one out of every three dollars traded on the US-listed options market.

Reporting by Hyunju Jin, Noel Randwich and Greg Rumeliotis; Additional reporting by Shruti Shankar, Subrata Patnaik, Medha Singh and Bansari Mayur Kamdar in Bengaluru; Katanga Johnson and Chris Prentiss in Washington, Tom Westbrook in Sydney and Saqib Iqbal Ahmed and Ira Iosbashvili in New York; Editing by Peter Henderson and Richard Pullin

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