Tesla CEO Elon Musk has offloaded a combined $US6.9 billion worth of shares in the electric car company this week, taking advantage of a meteoric rally that vaulted the firm’s value to more than $US1 trillion
The billionaire sold 1.2 million shares held by his trust for more than $US1.2 billion on Friday, the latest in a flurry of stock transactions, according to a US securities filing released later in the day.
The world’s richest person and Tesla’s top shareholder last Saturday tweeted he would sell 10 per cent of his shares if users of the social media platform approved the move.
The 10 per cent would equate to about 17 million shares at the time of his tweet.
He has sold 6.36 million shares this week and needs to offload about 10 million more to fulfil his pledge.
Shares of Tesla closed lower on Friday, down 2.8 per cent at $1,033.42, snapping an 11-week winning streak.
The shares are up more than 46 per cent this year following a sharp rally in October.
The stock sales, which marked the first time Musk cashed out on a stake of that size since the company was founded in 2003, were massive by capital market standards, eclipsing the initial public offerings of most companies.
Tesla shares fell 15.4 per cent this week and lost some $US187 billion in market value, more than the combined market capitalisations of Ford and General Motors.
Despite the week’s losses, Tesla is still the most valuable car firm in the world. Recent strong gains in the stock have underscored demand for shares of electric vehicle makers.
After the blockbuster market debut of Rivian on Wednesday, the two most valuable US automakers are EV companies.
In a veiled jab at his new California-based rival, Musk tweeted on Thursday, “There have been hundreds of automotive startups, both electric & combustion, but Tesla is only American carmaker to reach high volume production & positive cash flow in past 100 years.”
Musk had previously said he would have to exercise a large number of stock options this year, which would create a big tax bill. Selling some of his stock could free up funds to pay those taxes.
Prior to the sale, Musk owned a stake of about 23 per cent in Tesla, including stock options.
After his exercise on 2.15 million stocks on Monday, he has options for 20 million more shares he needs to exercise by next August.