Tesla chief Elon Musk sold $1.1 billion worth of shares to cover taxes, filings say

Tesla Chief Executive Elon Musk sold about $1.1 billion worth of shares to cover tax obligations on options exercise, the billionaire reported in filings on Wednesday.

Musk exercised options to acquire nearly 2.2 million shares of Tesla and then sold about 934,000 shares, about 0.5% of his Tesla holdings.

The move gives Musk cash to pay for the tax bill associated with the exercising of the options, given that his wealth, pegged by Forbes at $281.6 billion, is tied to his stake in Tesla.

It also spares him the capital gains tax bill that he would have had to pay had he sold the shares without coupling their divestment with the exercising of the options.

The electric car maker’s stock rose 2% after the bell on the news, helping to offset a multiday sell-off that had endangered the company’s position in the $1 trillion club.

Retail investors made net purchases of $157 million on Monday and Tuesday, according to Vanda Research.

Tesla is now up more than 51% in 2021, thanks largely to an October rally that was fueled by an agreement to sell 100,000 vehicles to rental car company Hertz.