Tesla’s Musk exercises all of his stock options expiring next year


SAN FRANCISCO, Dec.29 (Reuters) – Tesla Inc (TSLA.O) chief executive Elon Musk exercised all of his options expiring next year, marking the end of his share sales that triggered a drop in the most valuable stock price in the world. Car manufacturer.

It has sold $ 16.4 billion in shares since early November, when it announced it would sell 10% of its Tesla shares if Twitter users agreed. They did it. Read more

Musk said last week that he would have finished selling shares once his scheduled sales ended. Read more

Register now for FREE and unlimited access to Reuters.com

Register

Musk put in place a pre-arranged plan in September for the sale of shares linked to options expiring next year and Tesla said in a filing on Tuesday that the program has ended.

The latest transactions, reported on Tuesday, included the exercise of an option on 1.6 million shares and the sale of 934,090 of those shares to pay taxes.

In total, Musk sold 15.7 million Tesla shares at the end of this year, roughly the 10% of the stake the billionaire had pledged to sell.

Tesla’s shares lost about a quarter of their value after Musk asked his Twitter followers in November whether he should sell 10% of his holdings. They rebounded last week when he said he was almost done with share sales, although the shares are still below the closing high of $ 1,229.91 in November.

Tesla shares were trading down 1.1% to $ 1,077.03 each on Wednesday.

Two days before Musk’s Twitter poll, Tesla shares hit an all-time high, extending gains triggered by an order for Tesla cars from rental company Hertz.

SURCHARGE

In 2012, Musk was granted the stock options vested when Tesla achieved specific milestones in market capitalization and other goals. He did not have to pay tax on the vested options until he had exercised most of them since November.

He exercised options to buy nearly 23 million shares at $ 6.24 each, a fraction of the Tesla share price.

Democrats, who control Congress, have proposed a surtax on income taxes and capital gains taxes that could come into effect next year.

“Exercising the options in 2021 would avoid the tax hike next year,” said Steve Rosenthal, senior researcher at the Urban-Brookings Tax Policy Center.

Tesla did not respond to a request for comment from Reuters.

Musk, the richest person in the world with a net worth of $ 276 billion according to Forbes, has said he will pay more than $ 11 billion in taxes this year.

Musk moved from California to Texas, where there is no state income tax.

He first said his sale of 10% of its shares was a response to criticism that the rich avoid taxes.

He recently suggested that he should sell certain stocks, regardless of the Twitter poll, to pay the taxes associated with exercising his options.

“I have Tesla options expiring next year, so I had to exercise those options no matter what,” he said in an interview with satirical conservative website Babylon Bee.

He added that he had sold additional shares to “try to reach the 10% level”.

Register now for FREE and unlimited access to Reuters.com

Register

Reporting by Hyunjoo Jin; Editing by Stephen Coates, Peter Henderson and Howard Goller

Our standards: Thomson Reuters Trust Principles.