Posted on 12/07/2021 8:42:40 PM PST by SunkenCiv
Tesla CEO Elon Musk sold a massive stake in his company over the past several weeks. And yet he owns 564,000 more shares than he did at the start of the selling spree...
That's because at the same time he is selling shares, he's also exercising options to buy additional stock. And he's doing so at a bargain exercise price of $6.24 a share, well below 1% of Tesla (TSLA)'s current share price. Since Musk's Twitter poll on November 6, he has exercised options to buy 10.7 million shares of Tesla. To be clear, he would have done so with or without the poll — the options were due to expire by August of 2022 if he didn't exercise them.
And Tesla is poised to award Musk even more options, pending its upcoming financial results. His stake in the company is the reason Musk is the richest person on the planet...
Whenever he exercises options, he becomes subject to a large income-tax hit because he received those options as his primary form of compensation.
He owes about $5 billion in federal income taxes on the new shares he has purchased since November 8. He also will probably owe some amount of state taxes. Musk sold off Tesla stock specifically to cover that tax hit, according to the filings.
Musk also plans to exercise additional options that are set to expire next year. He still has 12.2 million of those soon-to-expire options that he has not yet exercised.
If past practice is any indication, he'll sell about 5.3 million of those newly acquired shares to cover his tax bill. But that will still leave him with nearly 7 million more shares than he has today.
(Excerpt) Read more at cnn.com ...
Elon Musk has somewhat addressed the leaked email to SpaceX employees about a looming crisis facing the raptor engine production. In several tweet replies, Elon assures the issue is "getting fixed."Elon Musk addresses threat of bankruptcy, Starship Raptor Engine Crisis | December 3, 2021 | Ellie in Space
That'll l'arn 'em.
Soros did the same thing with the Bank of England. WHen he sold his shares of the bank, he would drive down the prince and then he bought them back at the lower price simultaneously.
No, he didn't. Soros shorted the British Pound; he was also was assessed a fine for insider trading in France. Musk is exercising options, as part of his compensation package. But nice try.
Well, that sounds like he knows how to play the market....along with a few million others.
He’s so focused on Mars colonization, I think he’s raising money to use on SpaceX.
I’ve got mixed feelings about Musk, but not at all about these transactions.
He’s no dummy, and hires good accountants and takes their advice.
I’m not saying that what Soros did was legal or ethical, but it seems to be the same economic mechanism as what Musk did. Sell lots to lower the costs of the shares and then use the money made to buy them back and more.
The price he is buying them at has NOTHING to do with thr current price, its an option he was given in compensation package. Is that so hard to understand?
No, it isn’t.
Musk is buying shares at a discount as part of his compensation package.
Stop acting as if you don’t understand this.
That’s fine. I wasn’t criticizing him for it.
How people acquire wealth, as long as it’s done legally, is a nonissue with me.
“He owes about $5 billion in federal tax...”
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But according to Biden and the other leftists, the rich “aren’t paying their fair share.”
“Soros did the same thing with the Bank of England. WHen he sold his shares of the bank, he would drive down the prince and then he bought them back at the lower price simultaneously.”
That is not what the article describes Musk doing. He is buying shares at stock option prices. That is not affected by the market price going down.
The market price going down probably reduces the tax he pays on the option purchase.
No, this is normal stock options as work compensation/payment.
At some point they expire, so it’s normal to sell some existing stock, to pay for exercising the options.
If he doesn’t, they expire and he misses the chance to turn $6 into $1200. Option is for $6, shares are at $1200.
Nothing conspiratorial.
If you actually believe that what soros did and musk did are "the same economic mechanism" you better stay out of any financial market without adult supervision.
The two acts couldn't be further apart, shorting a stock to drive the price down and selling stock {that you own, from a company that you founded} to cover a tax debt, are not even close, let alone, "the same economic mechanism" whatever the hell that means.
Lucy, you got some splain'en to do.
I am not a financial wizard but you have no idea how options as part of financial compensation works. Go study some.
I think Musk is smart enough to realize federal taxes are gonna go up, so take profits now.
He also moved from California to Texas which is trading 12.3% state income tax for zero.
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