Elon Musk Sells Nearly One Million Tesla Shares To Pay Taxes | Economy

Tesla, the electric car manufacturer, announced this Wednesday that its CEO, Elon Musk, has sold part of his stake in the company to meet tax obligations arising from the exercise of stock options. Musk has disposed of more than 930,000 shares worth $ 1.1 billion. He still has more than 170 million shares of the company he founded, according to the documentation filed on Wednesday with the securities regulator (SEC, in its English acronym).

Tesla’s price rose 4.3% to $ 1,068 per share, ending a sell-off that had compromised the firm’s position in the trillion-dollar club for several days. The movement has not surprised the market, since the magnate announced his plans on September 14, but it has managed to appease the concern generated by the peculiar way of managing the company of its founder. After making the sale plan public, Musk on Saturday asked his 62.5 million Twitter followers to vote in an informal poll, assuring them that their vote would determine the future of their 10% stake in Tesla. The response was unanimous: Almost 60% of the 3.5 million Twitter voters spoke in favor of the sale. However, Musk had decided to get rid of that package before listening to his followers, according to the document held by the SEC.

The informal survey, like a probe balloon, generated turmoil in Monday’s session on Wall Street, in which the company lost 7.2% of its market value, and losses of 150,000 million in just two days, by fear that the temperamental businessman would execute his plans and unbalance the supply and demand for securities by himself. With the operation, signed on Monday although officially communicated to the markets regulator this Wednesday, Musk has lost several tens of millions of dollars by selling at a price significantly lower than if he had done it before his tweet, for unsatisfied profits ( the stock options are derivative financial instruments with an expiration date).

Also erected as a space visionary at the helm of his company Space X, the move gives Musk liquidity to pay the taxes associated with exercising options, given that his estate, which according to Forbes is $ 281.6 billion, is tied to its stake in Tesla, according to Reuters. By the way, you save the capital gains tax that you would have had to pay if you had sold the shares without linking your divestment with the exercise of the shares. stock options. Thanks to this instrument, Musk bought the securities at a price significantly lower than their market value.

Despite the turmoil this week, the value of Tesla continues to grow. It recently closed a contract with the car rental company Hertz to supply it with 100,000 electric vehicles. The promotion of the electric car in the plans of the federal government, which aims to replace the old fleets of official vehicles with non-polluting ones, also promises to be a great business opportunity.

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