Elon Musk, the CEO of Tesla jobs, sold roughly $5 billion in shares, according to documents filed on Wednesday, just days after polling Twitter users about selling 10% of his stock.
Musk's trust sold nearly 3.6 million shares in Tesla, valued at around $4 billion, in his first share sale since 2016. He also sold another 934,000 shares for $1.1 billion after exercising options to acquire nearly 2.2 million shares.
According to Forbes, the 4.5 million shares represent about 3% of his total holdings in the electric vehicle manufacturer jobs, accounting for the vast majority of his estimated $281.6 billion fortune.
Musk polled Twitter users on Saturday about selling 10% of his stake, helping to drive down Tesla's share price after a majority said they agreed with the sale. On Tuesday, the stock fell 13% in a multi-day selloff that put the company's $1 trillion status in jeopardy but recovered 4.3 percent on Wednesday.
According to the filing, the options-related sales were set up in September through a trading plan that allows corporate insiders to set up preplanned transactions on a schedule. The option-related share sales covered the associated taxes. It was unclear how or if the trading strategy was related to Musk's Twitter poll. A request for comment from Tesla was not returned.
The additional share sales jobs were distinct and provided Musk with sizable cash reserves, given that his fortune is tied mainly to his stakes in Tesla and SpaceX. Musk has over 20 million additional stock options that will expire in August of next year.
If Musk follows through on his plan to sell 10% of his stock, it would be a slight negative in the short term, according to Mark Arnold, chief investment officer at Hyperion Asset Management in Brisbane, where Tesla is the top holding in its global fund.
“But the stock is pretty liquid and it's not a huge percentage of total issued shares, so it shouldn’t have that much of an impact ... we’re quite comfortable with the outlook for the business,” he said.
While Tesla's market value has dropped by nearly $150 billion this week, retail investors have been net buyers of the stock. On Wednesday, 58 percent of Tesla trade orders on Fidelity's brokerage website were for purchases rather than sales.
According to Vanda Research, retail investors made net purchases of $157 million on Monday and Tuesday. Tesla is now up more than 51% in 2021, thanks mainly to an October rally fueled by a deal to sell 100,000 vehicles to rental car company Hertz.
“The company itself is on fire, with strong results,” said Tim Ghriskey, a senior portfolio strategist at New York-based investment management firm Ingalls and Snyder.
According to a Reuters analysis of Trade Alert data, the company's options accounted for approximately $109 billion in premium changing hands over the last two weeks, or roughly one in every three dollars traded in the U.S.-listed options market.
