Tesla (TSLA) - Get Tesla Inc Report Chief Executive Elon Musk has sold more than $1 billion of stock over the past several weeks, yet he now owns even more shares of his electric car company than he did when he started selling, at the beginning of November, a media report says.
An analysis by CNN of his Musk’s stock-sale filings with the Securities and Exchange Commission shows Musk is not divesting his swath of holdings in his company, despite his promise to follow a Twitter poll to sell 10% of his stake.
The reason: At the same time he is selling shares -- some 10.1 million in total to date -- he is also exercising options to buy more. And he's doing so at an exercise price of $6.24 a share, less than 1% of Tesla's current share price of $1,046.
Since Musk's Twitter poll on Nov, 6, he has exercised options to buy 10.7 million shares of Tesla, something he had already planned to go forward with irrespective of how the Twitter panned out, since the options were due to expire by August 2022.
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At the same time, more stock options are in the cards for Musk, pending the company's financial results. Musk also plans to exercise an additional 12.2 million options that are set to expire next year, according to CNN.
To be sure, once Musk is done exercising those soon-to-expire options, he will have 22.9 million fewer options than he had at the start of this process.
But an additional 50.7 million other options will allow him to buy that many additional shares, albeit at a higher exercise price and with an expiration date of January 2028.
No matter when he exercise any of his options, Uncle Sam will be waiting.
Musk currently owes about $5 billion in federal income taxes on the new shares he has purchased since Nov. 8, as well as some state taxes, according to reports. Musk sold off Tesla stock specifically to cover that tax hit, according to the filings.
Based on past activity, Musk will likely sell another 5.3 million of his newly acquired shares to cover his additional tax bill, though that will still leave him with nearly 7 million more shares than he has as of today.
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