Tesla shares drop as sell-off accelerates

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  • Tesla stock was down 11% in mid-day trading Tuesday after CEO Elon Musk announced over the weekend that he was planning to sell 10% of his shares.
  • Current and former board members, including board chairman Robin Denholm, Elon Musk’s brother Kimbal Musk, Ira Ehrenpreis and Antonio Gracias, have also offloaded millions of dollars worth of Tesla shares since October 28.

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Tesla stock fell 11% in mid-day trading on Tuesday, extending losses for a second day after CEO Elon Musk proposed selling 10% of his shares in the electric vehicle business over the weekend.

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The decline is on pace to be the biggest of the year for the stock, and comes after a nearly 5% decline on Monday, bucking most of the upward trend for the year. Overall, Tesla shares are up more than 47% in 2021 and more than doubled from a year ago, as the company reported improving automotive margins and navigated a chip shortage to ramp production while faltering competitors .

Current and former board members, including Chairman Robin Denholm, Elon Musk’s brother Kimbal Musk, Ira Ehrenpreis and Antonio Gracias, have also taken off hundreds of millions of dollars worth of Tesla shares since October 28 when Tesla’s market cap crossed $1 trillion. Have given.

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Musk was awarded a hefty options package in 2012 as part of a CEO performance plan. Because he doesn’t take a salary or cash bonus, his wealth comes from those stock awards and gains in Tesla’s share price. The 2012 award was for 22.8 million shares at a strike price of $6.24 per share. They are due to expire on August 13, 2022.

They also have the additional options of an unprecedented 2018 CEO salary package.

The iconoclastic CEO has pledged at least 92 million of his Tesla shares to lenders to borrow cash. As previously reported by Businesshala, Musk may want to sell some shares to pay off his debt, and he faces a potential $15 billion tax bill if he exercises his options and sells the shares.

This story is developing. Please check back for updates.

–Yun Lee contributed to this story

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