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Again, Elon Musk as sold more Tesla shares, pushing out over $1 billion’s worth, to hit a total offload of more than $10 billion.
Elon Musk, chief executive officer at electric vehicle car company Tesla Inc (NASDAQ: TSLA) has offloaded an additional Tesla 934,091 shares valued at $1.01 billion. According to reports, Musk is doing this to meet his tax obligations on the exercise of about 2.1 million options.
Early last month, Musk had stated on Twitter that he would sell up to 10% of his stock in Tesla subject to approval from his followers. A majority of them agreed, causing Musk to offload Tesla shares for the fourth consecutive week since November 8th. However, it really is not clear whether the poll had any influence on his decision. Currently, the CEO’s total offload is 10.1 million shares, worth $10.9 billion. Furthermore, Musk also has the option to buy back 10.7 million shares, at $6.24 per share, which expires in August next year.
As of early this morning Eastern time, Tesla shares (TSLA) were trading at around 0.6% higher in pre-trading. Earlier this week, the EV company announced that it officially relocated its headquarters. The new headquarters is its factory site in Austin, Texas.
Elon Musk Still Has Some Way to Go to Meet 10% Selloff of Tesla Shares
Musk actually gave indications months earlier that he might exercise a huge block of stock options as the year winds down to a close. Furthermore, he reportedly set up a trading plan to facilitate this before conducting his Twitter poll. To reach the 10% threshold, Musk would need to sell about 17 million shares, or 1.7%, of Tesla’s outstanding stock. In addition, factoring in his exercisable options means that he may have to sell even more.
If Musk goes ahead with the sale of 10% of his Tesla stake, he could end up cutting out well over $2 billion from his tax bill. This is potentially so, considering his relocation to the state of Texas from California last year. Texas does not currently have any state income tax or capital gains tax on individuals. Meanwhile, by sharp contrast, California has the highest income taxes on the wealthy in the United States.
Musk is currently the world’s wealthiest individual with a net worth of about $284 billion, according to the Bloomberg Billionaires Index. The Tesla CEO has seen his personal fortune skyrocket this year alone by about $128 billion. This is a result of the massive surge in Tesla stocks – 54% growth in total.
Tesla shares jumped by more than 12% in October after American car rental company Hertz Global Holdings ordered 100,000 vehicles. The order was worth about $4 billion and pushed the electric vehicle manufacturer’s market valuation over $1 trillion. Furthermore, this also represented the largest-ever single order in Tesla’s history and a major contributing factor in Musk’s fortune surge. Hertz was looking to overhaul its fleet of vehicles by going green – a phenomenon several car-centric companies, Uber included, are currently facing.