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Elon Musk Just Sold $10 Billion Tesla Shares. Is He Still The Richest Man on Earth?

Tesla CEO Elon Musk sold off another 934,091 shares of his electric vehicle manufacturing company

Tesla CEO Elon Musk sold off another 934,091 shares of his electric vehicle manufacturing company

Elon Musk sold off another 934,091 shares of his electric vehicle manufacturing company, Tesla, on Thursday. This comes after he recently sold off 10.1 million shares

Tesla CEO Elon Musk is on a selling spree off late. As per regulatory filings seen on Thursday, Elon Musk sold off another 934,091 shares of the electric vehicle manufacturing company. The shares, worth $1.01 billion, were sold off to meet his tax obligations in connection with the exercise of options to get hold of 2.15 million shares.

Since November 8, the chief executive officer of Tesla, who also owns SpaceX, has sold shares worth $10.9 billion. This equals to 10.1 million shares in total.

Why is Elon Musk Selling Tesla Shares?

In early November, the world’s richest person tweeted that he would sell 10 per cent of his stock if users of the social media platform approved. A majority of them had agreed with the sale on Twitter following which he sold the shares. However, according to a report by the Wall Street Journal, Musk was facing S3.5 billion tax bill on his options at the time. This would have amounted to more if Tesla stock did not plunge following the Twitter poll — which actually saved him $480 million.

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Following a flurry of options exercise, Musk still has an option to buy about 10 million more shares at $6.24 each, according to Reuters.  Musk’s option expires in August next year, which is a reason why he has gone on a share selling spree.

Tesla shares, though dropping after Musk’s’ Twitter poll, held to the $1 trillion market cap to become the most valuable car making company in the world. on Friday, Tesla share was selling at $1,084 a piece.

Elon Musk, however, was awarded Tesla stock option in 2012. This allowed him to buy 22.8 million shares at $6.24 each. But the offer is set to expire next year. The Tesla CEO, who has revealed that he is not paid in cash at the company and only hold stock, now has a limited time to make money out of his shares.

Tesla’s stock market price on Friday indicated that Elon Musk is likely to make a good profit out of this deal. However, this means that he has to pay taxes from 2012 to 2021 at a rate of 50 per cent. This will be in billions, but still a profitable option for the Tesla CEO.

Is Elon Musk Still the Richest Man in the World?

Musk’s 2021 stock selling spree comes five years after he had last sold the shares in 2016. He had at the time sold the shares to cover an income tax bill of $600 million, as per a BBC report.

Despite all this, Musk’s net worth stood at $283 billion on Friday, as per Forbes Billionaire index. Earlier this year, it pushed past the $384 billion mark, making him far richer than Amazon’s Jeff Bezos who is the second richest man in the world. Musk is still the world’s richest man.

If Musk goes by his promise in the Twitter poll, he has to sell around 17 million shares. This means that he has to say goodbye to another 10 million shares to fulfill his target.

Apart from Tesla, Musk, earlier this year, added $10.6 billion from SpaceX, the rocket company that he founded in 2002. SpaceX’s valuation has recently risen to $100 billion, making it the second-most valuable private company in the world, as per reports. This huge valuation is a result of its recent agreement with new and existing investors to sell up to $755 million in stock from insiders at $560 a share.

(With inputs from Reuters)

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first published:December 03, 2021, 12:28 IST