Elon Musk sells $1 billion in Tesla shares to cover taxes on stock options.
Elon Musk, the chief executive of Tesla, sold about $1.1 billion worth of Tesla shares on Wednesday to cover his tax obligations after exercising options on a much larger tranche of stock.
Mr. Musk sold 934,091 shares on Wednesday, according to filings with the Securities and Exchange Commission. Tesla’s stock closed trading on Wednesday at $1,067.95, which would bring the value of those shares to about $1 billion, but some were sold for slightly higher prices.
In the filings, Mr. Musk said he had sold the shares “solely” to cover taxes on 2,154,572 shares he picked up at $6.24 each. Those shares he acquired, for a total of $13.4 million, were instantly worth about $2.3 billion.
Mr. Musk still owns about 17 percent of Tesla’s stock, shares worth about $200 billion. Tesla recently passed $1 trillion in market valuation.
Over the weekend, Mr. Musk posted a poll to Twitter asking his followers whether he should sell 10 percent of his stock, referring to a political debate over whether the wealthiest Americans should be taxed according to their wealth rather than their income. He said he would abide by whatever respondents chose, and about 58 percent said to sell.
Tesla’s stock slid 16 percent in the two days of trading after his Twitter post, though it gained 4.3 percent on Wednesday before Mr. Musk disclosed his trades. Tesla’s shares were up slightly in aftermarket trading following his disclosures.
Mr. Musk holds more than 20 million stock options, worth nearly $30 billion, that expire in August. Many of those options are unlikely to qualify for preferential tax treatment, meaning he could owe billions of dollars in taxes if he exercises all of them.
After the sale on Wednesday, he still owns more options than he had last week.
Stephen Gandel contributed reporting.