Elon Musk Sells Over $6 Billion in Tesla Stock
Elon Musk is one of the world’s wealthiest entrepreneurs, with a reported net worth of over $300 billion.
Elon Musk has sold more than $6 billion worth of Tesla stock shares.
Elon Musk was reportedly forced to sell stock due to tax bill obligations which ranged from $10-15 billion.
Who is Elon Musk?
Elon Musk is one of the world’s richest entrepreneurs. He is the co-founder of Paypal and Tesla, as well as the founder and lead designer of SpaceX, a space transportation and communications company.
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Additionally, he is the founder of Neuralink, a company specializing in developing brain-machine interfaces that will connect the human brain to computers in the future. In 2015 Musk founded Open AI, an artificial intelligence research laboratory, and in 2016 he founded The Boring Company, a tunnel construction company. He also serves as chairman of the Tesla board.
As of November 2021, Elon Musk is reportedly worth over $300 billion, surpassing Jeff Bezos, the founder, and CEO of the largest online retail company, Amazon.
About Tesla
In 2003, Tesla was created, but Elon Musk did not join until 2004 after investing $30 million into the company and becoming chairman of the board.
The company is known for building clean energy electric vehicles and storage products. Tesla’s hope for the future is to move towards a zero-emission future. They believe that their electric cars are the best alternative to traditional gas-powered vehicles.
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Elon Musk Sells Tesla Stock Shares
On November 10, 2021, Elon Musk sold nearly $5 billion of Tesla stock. It is said that the plan had been set in motion before a Twitter poll that Elon Musk conducted last week amongst his followers.
Elon Musk polled whether or not he should sell some of his stock. More than 3 million of his followers agreed that he should, not knowing whether or not he had any prior obligations to sell. In order to avoid paying taxes on the capital gains of $28 billion, Elon Musk needed to sell a huge part of his stock.
It is being said that Musk plans to split the sale of his stock between this year and next year. The capital gains tax on the $28 billion could cost Musk somewhere around $15 billion.
There had been much speculation that the tax laws were going to change for the rich. The law proposed to tax unrealized capital gains in capital assets such as stock. Musk held a huge share of stock in Tesla.
Musk reportedly sold more than 4.5 million shares of Tesla stock (TLSA, +4.34%) for more than $1,100 per share. This came after Tesla’s stock dipped on Monday. Though the price per share decreased, the company still walked away with $1.102 billion.
According to the Security and Exchange Commission (SEC) filings, Elon Musk has already made plans to sell the stock since mid-September. However, Elon was reportedly forced to sell stock due to tax bill obligations and expiring options.
The agreement called for Musk to sell the stock before August of 2022, or the option would expire to do so. Selling the shares comes with a heavy federal tax bill of $1 billion. He will also acquire taxes in the state of California by this sale.
Elon Musk still has at least 17% ownership in Tesla or somewhere around 170 million shares. That alone is worth roughly $200 billion.
Despite all of the commotion, Tesla’s shares are still on the stock market rise. Following the release of the SEC filings, the stock increased 2.7%. The company is on track to breaking at least $50 billion in annual sales this year alone. In addition, Tesla’s outstanding market performance has inspired other automotive companies to develop plans for electric cars.
Two important lessons that we could all learn from Elon Musk and the sale of his Tesla stock:
- When it comes to building a business, it is best to keep all financial information off of social media. Elon stated that he only has shares of stock in Tesla and does not get paid any compensation from the company itself.
- The next lesson that we could take from the billionaire is to avoid paying taxes on capital gains is to borrow against your assets to cover your living expenses. Borrowing against assets is the same as loaning yourself money, and these types of loans are not taxable. This is another example of how the rich stay rich.
What are your thoughts on Elon Musk selling his Tesla shares? Comment your answer below.
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