DETROIT, AP – After making a promise on Twitter, Tesla CEO Elon Musk has sold about 900,000 shares of the electric car maker’s stock, netting more than $US1.1 billion ($A1.5 billion) to put towards paying his tax obligations.
The sales, disclosed in two regulatory filings late on Wednesday in the US, will cover tax obligations for stock options granted to Musk in September.
He exercised options to buy more than 2.1 million shares for $US6.24 each. The company’s stock closed on Wednesday at $US1,067.95 per share.
The transactions were “automatically effected” as part of a trading plan adopted on September 14 to sell options that expire next year, according to forms filed with the US Securities and Exchange Commission.
That was nearly two months before he floated the idea of the sale on Twitter.
After the transactions, Musk still owns about 170 million Tesla shares.
Musk was Tesla’s largest shareholder as of June, owning about 17 per cent of the company, according to data provider FactSet.
He is the wealthiest person in the world, according to Forbes, with a net worth of around $US282 billion, most of it in Tesla stock.
Last weekend, Musk said he would sell 10 per cent of his holdings in the company, worth more than $US20 billion, based on the results of a poll he conducted on Twitter.
The sale tweets caused a sell off of the stock on Monday and Tuesday, but it recovered a little on Wednesday, with shares up 2.6 per cent to $US1,096 in extended trading on Wednesday.
They have risen more than 50 per cent this year.
Wedbush Analyst Daniel Ives said it appears Musk will continue selling shares as the year ends.
“The question will be for investors if he sells his full 10 per cent ownership stake over the coming months or is it done piece-by-piece during 2022,” Ives wrote in a note to investors.
Ives calculated Musk has about $US10 billion in taxes due on stock options that vest next summer.
Musk said he proposed selling the stock as some Democrats have been pushing for billionaires to pay taxes when the price of the stocks they hold goes up, even if they do not sell any shares.
However, the wording on unrealised gains, described as a ‘billionaires tax’, was removed from President Joe Biden’s budget, which is still being negotiated.