“Tesla stock price is too high imo” – Elon Cashes in on $5 billion worth Tesla Stock

Elon sold around $5 billion worth of Tesla shares this week, shortly after his followers voted for him to make the sale in a Twitter poll.


But why…

As of last week Musk owned 17% of Tesla shares plus some $92 billion worth of stock options that allow him to buy more shares at a steep discount

He likely sold due to a giant upcoming tax bill. One set of his options expires in August 2022, meaning Musk will have to exercise his right to purchase the stock before that date or the options — currently worth $23 billion — will expire and he gets nothing. The issue: cash-poor Musk will owe taxes when he exercises the options.

Some types of options can be exercised without triggering immediate taxes, but Musk’s options will likely face the much higher ordinary income tax rate imposed on compensation.

Musk could end up owing north of 50% — more than $10 billion — between state and federal taxes, if he pays the top rates.

While Musk now lives in income tax-free Texas, California — where Musk previously lived for 20 years — may tax Musk on the value of options earned while he was a resident.

What Musk will do with the money

His portfolio is virtually 100% invested in two moonshot companies so now might seem like a good time for Musk to move some money around.

Musk has repeatedly suggested Tesla shares are overvalued. “Tesla stock price is too high imo,” he tweeted in May 2020. Since then, the stock has risen 630%.

Musk earlier said he would sell Tesla stock and donate the money to tackling world hunger if the United Nations could prove that a percentage of his wealth could save millions of lives globally from hunger.

Musk made the request Sunday responding to a tweet from noted researcher Dr. David Eli who said 2% of Musk’s wealth is worth $6 billion and said that the UN World Food Programme (WFP) raised $8.4 billion.

Unfortunately the UN failed to follow up with a solid plan which Elon could back.

Musk has also alluded to plans of funding a self-sustaining city on Mars of one million people by 2050 which would cost between $100 billion and $10 trillion.


Adding it all up

Musk currently has a real-time net worth of nearly $309 billion, according to Forbes, with his wealth surpassing the $200 billion mark two months ago.

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