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• Tesla CEO got into a spat with Bernie Sanders and tweeted, “I keep forgetting that you’re still alive,” after sanders advocated for billionaires’ tax
• Musk has 26 million stock options to be exercised before August 2022, and he earlier hinted that he would likely exercise “a huge block” of those options toward the end of 2021
Tesla Inc got out from the $1 trillion m-cap club on Monday, as its shares slipped, continued its downward trend since last week, suffering a heavy loss after chief executive Elon Musk offloaded almost $7 billion worth of shares and hinted more share sale.
The company slid about 5.3% to $978.60 on Monday morning in the New York trading session, bringing down the market value of Tesla below $990 billion. It has lost some $187 billion in market value over the past week.
On Friday, Musk, who held 23% shares of the electric carmaker, a combination of about 244 million shares through his trust and stock options as of the end of June, has sold around $1.2 billion worth of stocks which brings up the total amount he has pocketed to about $6.9 billion.
For a breakdown, Tesla CEO has sold around 934,000 shares for just over $1.1 billion from stock options and about 5.4 million shares from his trust’s holdings for approximately $5.8 billion over the course of the week.
Musk targets Bernie
Musk also got into a spat with Bernie Sanders after the 80-year old U.S. senator who unsuccessfully sought the Democratic Party presidential nomination in 2016 and 2020 repeatedly called for billionaires to pay more in taxes.
On Saturday, Sanders tweeted that “we must demand that the extremely wealthy pay their fair share,” without mentioning Tesla CEO; however, on the following day, Musk replied, “I keep forgetting that you’re still alive.”
In a subsequent tweet, the billionaire said, “Want me to sell more stock, Bernie? Just say the word … “ hinting that he might sell more shares in the future.
Eleven hours later, Musk still fired off a tweet and said Sanders “is a taker, not a maker.”
Lately, in the U.S., a debate has heated up amid revelations about how millionaires and billionaires avoid paying taxes while millions of Americans struggle to earn a living wage, and the Democrats
The U.S. Senate Democrats are increasing pressure on billionaires to pay appropriate taxes due to growing media attention and proposed taxing the stock holdings of billionaires to help pay for the Biden administration’s social and climate policies.
Musk, who has been a vocal critic of the Democrats’ plan, earlier urged Americans to protest against the proposed bill, tweeting, “Eventually they run out of other people’s money, and then they come for you.”
Meanwhile, “The Big Short” investor Michael Burry took aim on Musk again on Sunday, tweeting, “Let’s face it. @elonmusk borrowed against 88.3 million shares, sold all his mansions, moved to Texas, and is asking @BernieSanders whether he should sell more stock. He doesn’t need cash. He just wants to sell $TSLA.”
Burry, who has deleted his tweet, pointed out that Elon Musk might be capitalizing on the EV maker’s valuation and not selling Tesla stock because he’s short of cash.
Musk’s pre-planned sale
“Tesla shares have been sinking post the sale based on a Twitter poll last week. And Musk’s Sunday tweet deriding a senior politician may add pressure on the stock in the coming weeks,” Kunal Sawhney, the chief executive of equity research firm Kalkine Group, told Reuters.
While the share disposals began after Musk polled his 63 million Twitter followers on whether he should sell, some of the options-related sales were set up in September under a pre-arranged trading plan long before he consulted his followers.
Tesla CEO sold around 6.3 million Tesla shares last week and now needs to offload about 10 million more shares to fulfill his Twitter pledge to sell 10% of his holdings.
However, in his tweets, Musk didn’t mention that he has 26 million stock options that must be exercised before they expire in August 2022 and in September, he said that he would likely exercise “a huge block” of those options toward the end of this year.
“By offloading shares worth billions of dollars, Elon Musk is likely to accrue a tax bill of around $15 billion,” Sawhney said.
Picture Credit: CNBC