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$8.5 Billion Tesla Shares Traded as Elon Musk Sells Off

Tesla shares surged today as founder Elon Musk. Elon Musk Sells Tesla Shares in $8.5 billion worth of stock to cover tax payments related to his divorce from actress Tallulah Riley. Musk, the largest individual shareholder in Tesla, sold 35 million shares at $203 per share, earning him approximately $7 billion after commissions. The announcement was made by an investment bank on behalf of Musk’s limited liability company, Tesla Motors Inc., which he owns personally and not through a corporation. Further details are available in this Form 4 filing with the Securities and Exchange Commission dated August 2nd, 2016.

I don’t have a controlling vote now … I cannot support a sale, said Elon Musk

Tesla Inc Chief Executive Officer Elon Musk said on Monday he had no current intention of making a tender offer to buy Tesla Inc, but did not rule out doing so at some point in the future. Responding to questions after an earnings call, Musk was asked whether there were circumstances under which he would make such an offer and whether his recent purchase of $10 million in Tesla shares indicated that it was a possibility soon. He replied that it did not indicate anything because he already owned about 20 percent of Tesla’s outstanding stock and still faced other constraints on how much stock he could buy. I don’t have a controlling vote now … I cannot support a sale, said Musk.

Elon Musk Sells Tesla
Elon Musk Sells Tesla

The move comes ahead of the Nov 6th shareholder meeting

In a major vote of confidence for Tesla’s future, CEO Elon Musk has sold $24 million worth of shares to pay for potential tax bills from selling equity in his other company, SolarCity. More than 4 million shares of TSLA were traded today; trading was up by more than half on Thursday’s already-busy volume: Approximately 8 million shares were traded at prices between $225 and $228 over a 30-minute period during mid-morning trading hours. Once an overall volume is taken into account, that amounts to about 3 percent of outstanding shares being bought or sold—which means there were certainly far more trades than just 4 million TSLA transactions on today’s market.

My intention here is to ensure that Tesla exists at all…This is being made incredibly public, but this was very discussed in private, he said

10 million shares, vs an earlier plan of 5 million shares. This puts his total compensation package at $2 billion, more than any other CEO in history; keep in mind that he still has to pay half of that tax-free (thanks to laws passed during a different administration). Is it worth it? He is facing SEC lawsuits and shareholder lawsuits alike, with government officials investigating both for issues related to payments from foreign entities and for violations of disclosure requirements – not something that inspires confidence from shareholders or clients alike.

He also announced that he would be buying back more stock than his original plan

Musk said he would repurchase $10 million worth of stock, equivalent to 1% of his holding in Tesla after Tuesday’s sale. The buyback increases an earlier plan to repurchase up to $1 billion in shares. However, even with Tuesday’s moves, Musk still owns nearly 20% of Tesla—making him both one of its largest shareholders and a large creditor due to a multi-billion-dollar funding package that has taken on considerable risk. Despite short interest in TSLA being near all-time highs (~19%), it seems that many investors are unfazed by Mr. Musk’s recent moves…for now!

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