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Friday, February 3, 2023

Elon Musk sells more Tesla shares, but stock drops in early trading

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Tesla chief Elon Musk has sold another chunk of his stock after pledging on Twitter to liquidate 10% of his holdings in the electric car maker.

He sold about 640,000 shares for roughly 687.3 million dollars (£512.7 million), according to two filings with the US Securities and Exchange Commission.

So far this week, the chief executive has sold about 5.1 million shares worth about 5.69 billion dollars (£4.24 billion).

About 1.1 billion dollars (£820 million) of the proceeds will go towards paying tax obligations for stock options granted to Mr Musk in September.

The options are part of a compensation package he 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 a trillion dollars.

Filings from Wednesday disclosed that Mr Musk exercised options to buy just over 2.1 million shares for 6.24 dollars each.

Wedbush Analyst Daniel Ives has calculated that he has more than 10 billion dollars in taxes coming due on stock options that vest next summer.

Mr Musk’s sales so far amount to just over 3% of his stake in Tesla. He still owns about 167.5 million shares, or just under 17% of the company, according to the SEC filings and data provider FactSet.

Last weekend, he said he would sell 10% 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 on Monday and Tuesday. Shares were down another 2.2% in early trading on Friday, and are down about 15% for the week.

Mr Musk is Tesla’s largest shareholder and the wealthiest person in the world, according to Forbes, with a net worth of around 278.7 billion dollars (£207.9 billion).

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

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