Hyunjoo Jin & Subrat Patnaik

(Reuters) – Tesla (NASDAQ:) Inc CEO Elon Musk announced Wednesday that he had sold $5 billion worth of shares. This comes just days after a Twitter poll revealed to him 10% of Tesla’s stake.

Musk had never sold a stake this large since 2003 when the company was established.

HOW DID THE MUSK SELVE?

Musk stated on Saturday that he will sell 10% of his stake in the electric car maker if Twitter users agree. Musk owned approximately 244 million shares via his trust and stock options. This brought his share in electric car manufacturer to 23% at the end June. This included 170,000,000 shares that were held in trust.

Musk’s tweet wasn’t clear. Musk did not specify if he intended to sell 10% of the shares that he indirectly owns through trust, or whether his stock options would also be part of this transaction.

A flurry in transactions over the next week saw Musk’s first stock sale since 2016 reduce his stake in Tesla from 170,000,000 shares to 168m shares.

Musk bought 934,000 shares worth $1.1 Billion Monday, to meet tax obligations arising from the exercise of options to acquire nearly 2.2 M shares.

His trust sold the remaining 3.6million shares of Tesla worth approximately $4 billion on Tuesday and Wednesday.

Musk has approximately 3% equity in Tesla due to the sale of about 4.5 Million shares.

According to Tesla filings, Musk was able to purchase 22.86 millions shares for $6.24 each. These options expire Aug. 13.

Following Monday’s exercise of 2.15 Million Stocks, he now has the option to purchase 20,000,000 more shares by August next year.

DATE MUSK SHARES TESLA 10% of HIS STAKE

NOV.6, 2021 170MLNSHARES 17MLNSHARES

(MUSK TITES ON SALES

DATE SHARES SOLD

NOV. 8-10-2021, 4.5 Mln

WHY WAS MUSK CONSULT TWITTER USERS ABOUT STOCK SALES

Musk has yet to answer questions on why he started a twitter poll regarding stock sales, before he actually embarked on them. The manner he did it is not known if it violated securities laws.

Musk’s stock sales were huge by capital market standards and more than any initial public offering of many companies. Musk avoided speculation about him selling stock to cash out by getting his Twitter followers to endorse the move. Tesla’s shares had reached new highs and its valuation was now frothy.

What will MUSK do with the CASH?

Musk did not say how he would spend the roughly $4 billion in stock sales he received so far. Capital gains taxes apply to these earnings. Musk was the richest man in the world and he has always been happy with his Tesla share. Forbes had estimated that his fortune at $280 billion.

In order to borrow cash, he has taken out a loan against Tesla shares.

Musk is also the CEO of Space X. He stated Wednesday that multi-planetary life was “the main reason to accumulate capital.”