Nov 12 (Reuters) - Tesla CEO Elon Musk offloaded a combined
$6.9 billion worth of shares in the electric car company this
week, taking advantage of a meteoric rally that vaulted the
firm's value to over $1 trillion.
The billionaire sold 1.2 million shares held by his trust
for more than $1.2 billion on Friday, the latest in a flurry of
his stock transactions, according to a U.S. securities filing
released later in the day.
The world's richest person and Tesla's top shareholder last
Saturday tweeted that he would sell 10% https://www.reuters.com/technology/musk-asks-followers-twitter-whether-he-should-sell-10-his-tesla-stock-2021-11-06
of his shares if users of the social media platform approved
the move. The 10% would be about 17 million shares at the time
of his tweet.
He has sold 6.36 million shares this week - around 37% of 17
million. He now needs to offload about 10 million more shares to
fulfill his pledge to sell 10% of his holdings.
Shares of Tesla Inc closed lower on Friday, down
2.8% at $1,033.42, snapping an 11-week winning streak. The
shares are up more than 46% this year following a sharp rally in
The stock sales, which marked the first time that Musk
cashed out on a stake of that size since the company was founded
in 2003, were massive by capital market standards, eclipsing the
initial public offerings of most companies.
By getting Twitter users to green-light the move, he has
blunted potential criticism of cashing out at a time when
Tesla's valuation has become frothy and shares are at record
STILL MOST VALUABLE U.S. AUTOMAKER
Tesla shares fell 15.4% this week and lost some $187 billion
in market value, more than the combined market capitalizations
of Ford Motor Co and General Motors Co.
Despite the week's losses, Tesla is still the most valuable
automaker in the world. Recent strong gains in the stock have
underscored demand for shares of electric vehicle (EV) makers.
After the blockbuster market debut https://www.reuters.com/business/autos-transportation/ev-maker-rivian-set-high-profile-market-debut-after-mammoth-ipo-2021-11-10
of Rivian Automotive Inc on Wednesday, the two most
valuable U.S. automakers are EV companies.
In a veiled jab at the Irvine, California-based rival, Musk
tweeted https://bit.ly/3wGQ7fz on Thursday: "There have been
hundreds of automotive startups, both electric & combustion, but
Tesla is (the) only American carmaker to reach high volume
production & positive cash flow in past 100 years."
Musk had previously said he would have to exercise a large
number of stock options this year, which would create a big tax
bill. Selling some of his stock could free up funds to pay the
Prior to the sale, Musk owned a stake of about 23% in Tesla,
including stock options. After his exercise on 2.15 million
stocks on Monday, he has options for 20 million more shares he
needs to exercise by next August.
"We expect the share sales will continue, as Musk holds
millions of options worth billions of dollars that would
otherwise expire worthless, and he has also prearranged share
sales under 10b5-1 plans," said Jason Benowitz, senior portfolio
manager at the Roosevelt Investment Group LLC in New York.
(Reporting by Hyunjoo Jin in San Francisco and Subrat Patnaik,
Akash Sriram and Medha Singh in Bengaluru
Additional reporting by Caroline Valetkevitch in New York
Editing by Matthew Lewis and Rosalba O'Brien)