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Elon Musk unloaded billions of Tesla inventory—and nonetheless owns greater than final yr

SpaceX founder and Tesla CEO Elon Musk holds a helmet as he visits the development website of Tesla’s gigafactory in Gruenheide, close to Berlin, Germany, Could 17, 2021.

Michele Tantussi | Reuters

Elon Musk unleashed a torrent of inventory gross sales, choices workout routines, tax fee gross sales and gifted shares final yr totaling almost $22 billion. But even after unloading a lot Tesla inventory, he nonetheless owns a bigger share of the corporate, because of his compensation package deal.

Musk bought $16 billion in shares final yr and, in response to a submitting with the Securities and Alternate Fee Monday, gifted 5 million shares, price almost $6 billion, to an undisclosed charity or recipient in November. The gross sales and items deliver his whole to about $22 billion — a mixture of tax funds, money in his pocket and the present.

But due to the character of the choices workout routines, Musk really completed the yr with a bigger possession stake — and extra shares — in Tesla. In 2012, Musk was awarded choices on 22.8 million shares, price about $28 billion final fall when he began promoting.

The way in which the choices workout routines work is that Musk first began changing the 22.8 million choices into shares. The choices had a strike worth of solely $6.24, so he may pay $6.24 for every possibility and get a share of Tesla inventory, which had been buying and selling at greater than $1,000 final fall.

With every choices conversion, he would simultaneously sell shares to pay the taxes, for the reason that choices are taxed as revenue. Whilst he was unloading billions of {dollars} price of shares to pay the taxes, he was accumulating an excellent bigger quantity of inventory on the low choices worth — thus rising his possession of the corporate.

In whole, Musk bought 15.7 million shares for $16.4 billion. Add to that the gifted shares, and he unloaded a complete of 20.7 million shares. But he gained 22.8 million shares by means of the choices train — leaving him with 2 million extra shares in Tesla on the finish of the yr. He at the moment owns 172.6 million shares, giving him a 17% stake within the firm, making him far and away the only largest particular person shareholder.

Musk kicked off his share activity with a poll on Nov. 6, telling his followers “A lot is made these days of unrealized positive aspects being a way of tax avoidance, so I suggest promoting 10% of my Tesla inventory. Do you help this?” Musk vowed to comply with the outcomes of the ballot, which ended up with 58% in favor of a sale and 42% in opposition to.

Ultimately, he made good on the promise of promoting 10% of his stake. However he gained much more again with choices — giving him a round-trip-stock journey that left him with billions in money, the biggest single tax fee in U.S. historical past and much more Tesla shares.

Musk’s possession — and $227 billion fortune — is prone to skyrocket once more sooner or later. His subsequent large pay package deal, which could possibly be even bigger than the 2012 award, expires in 2028.

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