Taking Stock of Tesla Stock

Taking Stock of Tesla Stock

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by Gill D on November 15, 2021

According to financial records issued before this past weekend, the Tesla Technoking, Elon Musk sold nearly $1.2 billion in Tesla stock on Friday. He still owns over 166 million shares in the business. Over the course of the week, Musk sold nearly $6.9 billion in company stock. Some of the shares were sold to cover tax liabilities arising from the execution of stock options.

The stock price of the corporation was affected by these sales. For the week, Tesla stock fell 15.4 percent, marking the company's worst one-week performance in 20 months. Except for drops in February and March 2020, when the coronavirus pandemic sent markets sliding, this was Tesla's worst week ever.

Following a record closing price of $1,229.91 on Nov. 4, 2021, Tesla shares are still up roughly 46 percent year to year.

Musk urged his 60 million Twitter followers to vote in an informal poll on Nov. 6, telling them that their decision would determine the destiny of his Tesla holdings. However, according to financial paperwork submitted earlier this week, some were set for sale this week regardless of the poll's conclusion.

Musk had previously stated that he planned to sell "a significant block" of his options in the fourth quarter. Musk stated his marginal tax rate would be over 50% when his Tesla stock options expire when he spoke at the Code Conference in September.

Elon Musk at the Code Conference 2021

 

Top Tesla Execs Sell Shares

Kimbal Musk, a Tesla board member, sold $108 million worth of his own stock in the firm just days before his brother began selling billions of dollars’ worth of Tesla shares.

His sale is eclipsed by his brother Elon's $5.7 billion Tesla stock sale this week, which took place from Monday to Thursday. However, it accounted for a far greater portion of his Tesla (TSLA) assets, accounting for roughly 15% of Kimbal's total position in the firm. So far, Elon's stock has dropped only 3% as a result of his sales through Thursday.

Despite the fact that Elon Musk's transactions were the first since 2016, Kimbal Musk has been selling his own Tesla stock on a regular basis. Many other top executives and members of the board of directors at the world's most valuable automaker have done the same.

Since taking over as chair of the board in late 2018, Robyn Denholm has been selling shares on a regular basis. In the last two years, she has sold all of the shares she has just acquired after exercising options she received as part of her remuneration. On a split-adjusted basis, she has sold approximately 412,000 Tesla shares, leaving her with the same 5,000 Tesla shares she had two years earlier, right before the stock began to soar.

Her shares were obtained by executing stock options that cost her a fraction of their market value, resulting in a profit of $200 million. She would have made a lot more money if she had kept the shares she bought and sold right away, which would have been worth $438 million.

Tesla's Master of Coin, Zachary Kirkhorn, who used to hold the more traditional title of chief financial officer, has also been selling shares on a regular basis. On a split-adjusted basis, he's sold between 750 and 1,250 shares, totaling 25,250 shares, for an average price of $503 a share, or about half of their present worth, during the last two years. He received $12.7 million as a result of this.

 

Premature Sell?

All three are likely to suffer as a result. Tesla stock has risen about 2,000 percent in the last two years, after the firm stunned investors with a successful third quarter in 2019. This was the start of a run of prosperous quarters. Many investors were concerned before the company's October 2019 report that it might be facing a liquidity problem.

Tesla has become the sixth US firm to reach a market capitalization of $1 trillion, surpassing the aggregate market capitalization of the world's 12 top automakers and making Elon Musk the richest person on the globe.

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