Elon Musk Is Done Exercising Options As Part Of Trading Plan

Musk officially exercised all Tesla stock options expiring next year.

By: Steven Loveday

Dec 29, 2021 at 11:07am ET

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Tesla CEO Elon Musk has been selling stock shares in the company on a weekly basis for some time now, and it has caused quite a stir from Tesla investors on both sides of the aisle. Tesla's share price has been dropping on the news that Musk is selling.

This meant that long shareholders could buy in at a lower starting point, and those shorting could take advantage of the dropping share price, as well as timing various transactions in order to take advantage of the impact of Musk's sales.

For those unaware, or – like many of us at InsideEVs – simply not educated on the ins and outs of the stock market, Musk has been selling shares to pay taxes on options he's exercising. Those options are set to expire next year, and Musk would be crazy not to take advantage of them. That said, at a tax rate of 53%, all things considered, he has to sell some 10% of his stock to pay the taxes.

Back in Early November 2021, Musk asked on Twitter if he should sell 10% of his Tesla stock. He also said he would abide by the results, and he reiterated that he doesn't take a cash salary, and the only way to pay taxes is to sell stock. There are other, arguably less desirable options Musk could have potentially explored, but selling stock was the most direct plan.

Interestingly, it was later learned that Musk already had a plan in place to sell the stock, though perhaps he could have canceled the plan if his followers vote "No." At any rate, Musk has been actively carrying out the 10b5-1 trading plan since then.

Not long ago, Musk, in an interview with The Babylon Bee, made a statement that seemed to suggest he was done selling stock. However, he never officially said he was done, and he proceeded to sell more stock after the interview.

Of course, many investors have been tracking Musk's stock sales via related filings, and he's now officially done executing the predetermined plan. Musk could choose to sell more stock for whatever reason, but there's no doubt at this point that the plan has been fully carried out.

According to a recent filing following the Tesla CEO's exercise of 1.6 million shared on Tuesday, December 28, 2021, all options have been exercised. The filing reads:

"This rule 10b5-1 trading plan was completed on December 28, 2021."

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As part of the same related filling, Musk sold 934,090 shares, which resulted in over $1 billion to pay the taxes.

According to Reuters, Musk sold some $16.4 billion worth of shares over the course of the trading plan's execution. The publication also noted that out of the 15.7 million Tesla shares Musk recently sold, 10.3 million were part of the option's exercise, and 5.4 million were additional unrelated sales.