Walking the Walk: Elon Musk Sells $5 Billion of Tesla (TSLA) Shares After Twitter Poll, Analyst Not Surprised as Tax Bill Estimated at Over $10 Billion

Elon Musk sold roughly $5 billion of Tesla (NASDAQ: TSLA) shares already, according to the fillings.

In a series of trades executed on Tuesday and Wednesday, Musk disposed of over 3.5 million shares worth around $3.88 billion. It is important to note these were not scheduled sales. Earlier Wednesday, Musk was selling a block of shares worth more than $1.1 billion through a plan introduced on September 14.

The unscheduled sale of shares comes days after Musk asked his 62.5 million Twitter followers whether he should sell 10% of his stake in Tesla. Musk told voters that he will comply with the end result with 57.9% voting “Yes.”

Musk previously signaled that he is likely to sell “a huge block” of his options in Q4 to avoid a massive tax bill. Wedbush analyst Dan Ives estimates that Musk was due a bill of over $10 billion, hence not a surprise that Musk created a Twitter “soap opera”.

“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 heading during 2022. This also explains some of the weakness we have seen in shares starting on Monday following Musk hitting the trigger on selling stock,” Ives said in a client note.

Ives adds that the Street is braced for Musk selling up to 5% to 6% of his ownership stake, while the sale of a 10% take “could surprise some investors.” Musk owned a roughly 22% stake in Tesla at the end of June.

“In a nutshell, we would rather Musk rip the band-aid off now and sell this portion of stock rather than it lingering over the next year and feeding into any non-fundamental bear thesis on the story. Fundamentally speaking, Tesla remains in pole position to drive this EV adoption curve to the next level both domestically and globally with Musk & Co. leading the way in this $5 trillion green tidal wave over the next decade,” Ives added.

Tesla stock price is up nearly 3% in pre-open Thursday.

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