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New York: Tesla chief executive officer Elon Musk on Wednesday sold shares of the electric carmaker, shortly after holding a poll on Twitter. He had announced selling 10 per cent of his holdings in Tesla – more than $20 billion worth by most calculations – based on the results of the Twitter poll he conducted over the weekend.
Musk exercised options to acquire nearly 2.2 million shares of Tesla and then sold about 934,000 shares — about 0.5% of his Tesla holdings.
Before the sale plan was made public, Elon Musk asked his 62.5 million Twitter followers to vote in an informal poll, telling them their vote would determine the future of his Tesla holdings. About 58 per cent of more than 3.5 million votes had asked him to sell the stock.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
— Elon Musk (@elonmusk) November 6, 2021
It was mentioned in the regulatory filings that the shares were sold “solely to satisfy the reporting person’s tax withholding obligations related to the exercise of stock options,” according to Bloomberg.
Following the Twitter poll, shares of Tesla slumped more 15% over Monday and Tuesday, before rebounding more than 4% on Wednesday.
Tesla said Musk sold shares on Monday to satisfy tax withholding obligations related to exercising stock options to purchase 2,154,572 shares at $6.24, a huge discount from Tesla’s closing share price of $1,068 the same day.
He then sold 934,091 share at prices ranging from $1,135 to $1,196.
While Tesla has lost close to $150 billion in market value this week, retail investors have been net buyers of the stock. Some 58% of Tesla trade orders on Fidelity’s brokerage website on Wednesday have been for purchases, rather than sales.
Retail investors made net purchases of $157 million on Monday and Tuesday, according to Vanda Research.
Tesla is now up more than 51% in 2021, thanks largely to an October rally that was fueled by an agreement to sell 100,000 vehicles to rental car company Hertz.
“The company itself is on fire, with strong results,” said Tim Ghriskey, a senior portfolio strategist at New York-based investment management firm Ingalls and Snyder. “That is not going to fade quickly.”
Bullish sentiment returned to Tesla’s options on Wednesday, with about 1.1 calls traded for every put. Calls are typically used for bullish trades, while buying puts shows a bearish bias.
The company’s options accounted for about $109 billion in premium changing hands over the last two weeks, or about one in every three dollars traded in the U.S.-listed options market, according to a Reuters analysis of Trade Alert data.
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