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Tesla CEO Elon Musk has offloaded over $US6.9 billion worth of shares in the electric car company this week, taking advantage of a meteoric rally that increased the company’s value to over $US1 trillion
According to a US securities filing that was released last Friday, the billionaire sold 1.2 million shares held by his trust for more than $US1.2 billion in a flurry of stock transactions.
The world’s richest person and Tesla’s top shareholder tweeted last Saturday that he would sell 10 per cent of his shares, equating to about 17 million, if users on the platform approved the move.
So far, Musk has sold 6.36 million shares this week. He will still need to offload about 10 million more to fulfil his pledge.
Snapping an 11-week winning streak, the Tesla shares closed lower last Friday, going down to 2.8 per cent at $1,033.42.
Meanwhile, a sharp rally in October has seen a 46 per cent increase of shares this year.
The stock sales marked the first time Musk cashed out on a stake of that size since Tesla was founded. The sales were massive by capital market standards, even eclipsing the initial public offerings of most companies.
Although Tesla shares fell 15.4 per cent this week and lost some $US187 billion in market value, which is more than the combined market capitalisations of Ford and General Motors, Tesla is still the most valuable car firm in the world. Recent strong gains in the stock have underscored demand for shares of electric vehicle makers.
The blockbuster market debut of Rivian last Wednesday showed that the two most valuable US automakers are EV companies.
“There have been hundreds of automotive startups, both electric & combustion, but Tesla is only American carmaker to reach high volume production & positive cash flow in past 100 years,” Musk tweeted in a veiled jab at his new California-based rival last Thursday.
Musk had previously said he would have to exercise a large number of stock options this year, creating a big tax bill. Selling some of his stock could free up funds to pay those taxes.
Prior to the sale, Musk owned a stake of about 23 per cent in Tesla, including stock options.
After his exercise on 2.15 million stocks on Monday, he has options for 20 million more shares he needs to exercise by next August.
with AAP
Eliza Sayon is an experienced writer who specialises in corporate and government communications. She is the content producer for Public Spectrum, an online knowledge-based platform for and about the Australian public sector.
