CEO Elon Musk offered extra inventory once more on Thursday. The most essential phrase in that sentence is once more.
Musk exercised extra administration inventory choices granted again in 2012, shopping for about 2.2 million Tesla (ticker: TSLA) shares for $6.24 every. He then offered one other 934,091 shares to pay taxes. That is smart as a result of administration inventory choices beneficial properties are taxed like common earnings when they’re exercised.
Investors are conscious that Musk is exercising, however the tempo has been agonizingly gradual. This is the eighth time he’s exercised a tranche of administration inventory choices. To end, he has 4 extra tranches to train over the approaching two weeks—if his current shopping for and promoting sample holds.
Thursday, he offered the 934,000-plus shares in 58 separate transactions. He has offered inventory related to the choices exercising in an unimaginable 455 separate transactions.
Including different inventory just lately offered—not a part of the choices train—Musk is as much as virtually 13 million shares offered in about 740 separate transactions. The shares offered are value about $13.6 billion.
The gradual tempo of gross sales has been an issue for the inventory. Shares are down about 24% since Musk introduced his intention to promote some inventory. The
Dow Jones Industrial Average
are each down roughly 1% over the identical span.
The 13 million shares signify about 7.6% of the roughly 170 million shares Musk held earlier than he began exercising choices. Even with all of the current promoting, Musk now holds about 175 million shares of Tesla inventory. His holdings have elevated as a result of he’s held on to about 1.3 million shares each time he’s exercised certainly one of his inventory possibility tranches.
It’s odd math. But the method to promote billions value of Tesla inventory so rapidly, in so many separate transactions, can be, frankly, somewhat odd. Still, most buyers seem to consider Musk’s final objective is to promote 17 million shares in whole. He dedicated to promoting 10% of his stake when his stake was on the 170 million mark.
If 17 million is the proper quantity, then Musk’s promoting is nearing an finish.
Write to Al Root at email@example.com