After he sold what was worth $7 billion of Tesla shares this week, the billionaire, Elon Musk said that the result of this sale was “closer to tax maximization than minimization.”
On Twitter, someone wrote a suggestion to Musk, that Tesla’s shares will increase if Musk sells options instead of shares.
There's an incorrect narrative that @elonmusk will somehow gain more shares by selling common stock and exercising options. Elon would be much better off NOT selling common stock, and just selling portion of his options instead. Compare scenario #1 and #4 in chart. pic.twitter.com/B5ScCwVFgH
— Dave Lee (@heydave7) November 13, 2021
So Tesla CEO responded by saying:
“A careful observer would note that my (low basis) share sale rate significantly exceeds my 10b (high basis) option exercise rate, thus closer to tax maximization than minimization,”.
A careful observer would note that my (low basis) share sale rate significantly exceeds my 10b (high basis) option exercise rate, thus closer to tax maximization than minimization.
— Elon Musk (@elonmusk) November 13, 2021
Mr. Musk had sold $6.9 billion worth of shares in Tesla until Friday. He took the chance of raising the valuation of the electric vehicle company to over $1 trillion.
- The Story Behind Elon Musk Career and Wealth Success
- Tesla Stock Price Drops After Elon Musk Poll to Sell His Shares Was Voted Yes
Due to the huge number of taxes that he should pay, selling some of his stock wasn’t an option. A week ago, Musk tweeted “the most expensive tweet in history” when he asked the followers if he should sell 10% of his Tesla shares. After this tweet musk has lost $50 billion in two days due to a sharp decline in Tesla’s share value. The majority of people who voted said yes to the poll and support the decision of the sale.