Tesla CEO Elon Musk
Frederic J. Brown/AFP via Getty Images
Filings with the Securities and Exchange Commission revealed early Friday more stock sales by Tesla CEO Elon Musk. The slow, somewhat strange process, to sell 10% of his stake seems to be progressing—albeit at a snail’s pace.
Musk sold another 634,000 shares worth about $656 million on Thursday, with the SEC filings made Friday morning. Typically, sellers who are required to file have a couple of days to file the reports.
The Friday filings bring the total number of shares sold to roughly 4.6 million, worth about $5 billion. Musk has about 12 million or 13 million more to go to satisfy the results of his Twitter (TWTR) poll that asked if he should sell 10% of his stock and pay tax as part of the debate about billionaire taxation.
Most of Musk’s wealth is in Tesla stock and investors don’t pay taxes on stock gains until sales happen.
The sale is proceeding in a very strange way. The stock has been sold in about 278 separate transactions. Typically, when someone has a block as large as Musk does to sell, a larger broker like Goldman Sachs (GS) will manage the process like a secondary stock offering—building demand among their clients and executing the entire sale over a couple of days.
Selling millions of shares in a lot of small transactions is, frankly, odd. “In 30 years, I’ve never seen a company sell [a block] this way,” said Future Fund Active ETF (FFND) managing director Gary Black in a Thursday tweet, following the first filings detailing Musk’s sales.
Black is a Tesla bull and Tesla stock is one of the largest holdings in his fund. He is worried, however, that Tesla stock can’t continue its rise until Musk is done selling.
Tesla stock is up about 51% year to date. Shares are up about 0.4% in premarket trading. S&P 500 and Dow Jones Industrial Average futures are both up about 0.2%. Coming into Friday trading, however, Tesla stock is down about 13% for the week in the aftermath of the Musk Twitter poll.
At this point, investors can expect more filings detailing Musk’s sales until he hits his self-imposed goal. They should also expect it to happen slowly.
Write to Al Root at [email protected]
