Tesla shares go up after Musk’s Twitter-induced $5bn offload
Tesla shares have gone up as chief executive Elon Musk sold $5bn of his stocks following a Twitter poll.
The car maker’s shares have increased by 3.3 per cent to $1,103.40, recovering from a slump suffered earlier this week, when they closed 5 per cent lower on Monday compared to the previous Friday.
Market shares suffered the slump after the Tesla chief executive called on his followers to vote on whether he should sell 10% of his holdings in the company, and 57.9% of the 3.5 million votes were cast supporting a sale.
Musk – who is in the race to become the world’s first trillionaire – promised to stick to the results, tweeting: “I will abide by the results of this poll, whichever way it goes.”
The sales, disclosed in two regulatory filings late on Wednesday, will cover tax obligations for stock options granted to Mr Musk in September.
He exercised options to buy just over 2.1 million shares for 6.24 dollars (£4.66) each. The company’s stock closed on Wednesday at 1,067.95 dollars (£796.72) per share.
The transactions were “automatically effected” as part of a trading plan adopted on September 14 to sell options that expire next year, according to forms filed with the US Securities and Exchange Commission.
That was nearly two months before he floated the idea of the sale on Twitter.
After the transactions, Mr Musk still owns about 170 million Tesla shares.
A tenth of Mr Musk’s Tesla holding is worth around 20 billion dollars (£14.92 billion) and the poll on Twitter caused a sell off of the stock on Monday and Tuesday, but it recovered some on Wednesday.
Wedbush Analyst Daniel Ives said it appears Mr Musk will start selling shares as the year ends.
“The question will be for investors if he sells his full 10% ownership stake over the coming months or is it done piece-by-piece during 2022?,” he said.