Musk sells more Tesla shares; stock drops in early trading

Tesla CEO Elon Musk sold another chunk of his stock on Thursday after pledging on Twitter to liquidate 10 per cent of his holdings in the electric car maker.

Musk sold about 640,000 shares for roughly $687.3 million, according to two filings with the US Securities and Exchange Commission. So far this week, the eccentric CEO has sold about 5.1 million shares worth about $5.69 billion.

About $1.1 billion of the proceeds will go toward paying tax obligations for stock options granted to Musk in September. The options are part of a compensation package Musk and Tesla agreed to in 2018 that provided the CEO with options if Tesla hit certain financial targets. The company is now profitable and worth more than $1 trillion.

Also Read | Tesla shares inch higher after Musk sheds $5 bn in equity

Filings from Wednesday disclosed that Musk exercised options to buy just over 2.1 million shares for $6.24 each. Wedbush Analyst Daniel Ives has calculated that Musk has more than $10 billion in taxes coming due on stock options that vest next summer.

Musk's sales so far amount to just over three per cent of his stake in Tesla. He still owns about 167.5 million shares, or just under 17 per cent of the company, according to the SEC filings and data provider FactSet.

Last weekend, Musk said he would sell 10 per cent of his holdings in the company, based on the results of a poll he conducted on Twitter. The sale tweets prompted heavy selling in the stock Monday and Tuesday. Shares were down another 2.2 per cent in early trading on Friday, and are down about 15 per cent for the week.

Musk is Tesla's largest shareholder and is the wealthiest person in the world, according to Forbes, with a net worth of around $278.7 billion.

Tesla Inc. is based in Palo Alto, California, although Musk has announced it will move its headquarters to Texas.

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