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Could Elon Musk sell more of Tesla stock?

By:
on Dec 22, 2021
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  • Elon Musk says he has achieved the target of selling 10% of his stake in Tesla.
  • SEC filings from last night suggest he could sell more in the coming weeks.
  • Shares of the electric vehicle maker closed nearly 7.5% up on Wednesday.

Tesla Inc (NASDAQ: TSLA) closed nearly 7.5% up in the stock market on Wednesday after CEO Elon Musk said he had achieved the target of selling 10% of his stake in the leading U.S. electric car manufacturer.

I sold enough stock to get to around 10% plus the options exercise stuff.

Insights from last night’s SEC filings

Musk had laid out this goal for the stock sale in November, but SEC filings from last night suggest he could sell more in the coming weeks.

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Musk wanted to sell a total of 17 million Tesla shares, out of which, he has sold 13.5 million so far, as per the filing. Theoretically, therefore, he still has another 3.5 million shares to go. According to CNBC’s Robert Frank:

The options exercise stuff he talks about is the $23 billion worth of options he has to exercise by August. His tax bill on that will be over $11 billion – highest in U.S. history. So, he has more selling to do because he still has 3 million options to exercise. If he doesn’t, he’d be leaving $3.0 billion on the table.

Why did Musk pick 2021 for the stock sale?

Frank also agreed that Musk might have picked 2021 for the stock sale because taxes could be higher in the next calendar year.

If you look at the stock sales, there were two buckets; one was the pre-scheduled sales that were part of the options exercises and the taxes, and another $6.0 billion that was completely discretionary, likely due to tax increases at the Federal level.

Earlier this week, Guggenheim initiated Tesla at “neutral” with a price target of $924 that represents an about 8.5% decline from here.

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