Last Friday, shares of Tesla were trading just barely under the all-time high they’d reached the day before. Three days later, following Elon Musk’s infamous “should I sell shares to pay my taxes” Twitter poll, the stock had its biggest two-day nosedive in over a year. Wouldn’t it have been nice, as a shareholder, to sell off part of your investment on that Friday?
Kimbal Musk, Elon’s hat–enthusiast brother, certainly seemed to think so. According to an SEC filing, he sold 88,500 shares of Tesla on Friday, November 5th. Those shares, sold for between $US1,223.06 (A$1,668) and $US1,236.89 (A$1,686.85) each, netted Musk just under $US1.9 (A$3) million.
Those 88,500 shares accounted for 15% of Musk’s entire stake in Tesla. According to Wallmine, a tracker of trades from individuals, they also made for Musk’s biggest single trading day ever. Other outlets have implied a link between Musk’s trades and the eventual Twitter poll, but they seem to be forgetting a crucial fact: No one can predict what Elon Musk will do on Twitter.
Digging deeper through the Wallmine report, Musk’s been very lucky with his Tesla trades. Back on February 9th of last year, he sold 30,000 shares of the company, netting him over $US25.5 (A$35) million just days before Bitcoin and Covid-related factors dragged the company’s stock to new lows.
On September 1, 2020, Musk lopped off an even bigger chunk of shares: 36,375 of them for a total haul of $US17.5 (A$24) million. Less than a week later, Tesla was left off a list of companies to be included in the S&P 500 — causing the stock to have its largest single-day drop in history.
On November 12, 2019, Musk sold a whopping 64,285 shares of Tesla. He raked in $US22.5 (A$31) million from the sale, which likely helped him through the stock’s Cybertruck debut woes. It seems Kimbal Musk carries a smart, cautious brain under all those cowboy hats.
That brain also seems to be very careful about taxation. Remember those top two lines in the SEC filing, the ones I said would come back later? The latter of the two shows Musk buying 25,000 shares of Tesla for $US74.14 (A$101) each. He’s exercising an option granted to him under his directorship at Tesla, as part of an executive compensation package, that locked in that stock price years ago.
Exercising that option cost Musk nearly $US1.9 (A$3) million, but those shares immediately had a market value of over $US30 (A$41) million. As shown in the first line of the SEC chart, Musk immediately donated them all to charity — saving him a cool $US28.9 (A$39) million in taxes. It’s a below-the-line deduction, meaning Musk isn’t taking that amount off the top of his reported income, but it’s still a considerable savings.
It looks like the younger Musk is not only a bit of a financial whiz — he’s extraordinarily lucky. To consistently move major holdings in Tesla, always right before a major drop, Kimbal Musk must’ve found some particularly potent four-leaf clovers as a kid. Maybe he keeps them hidden under all the hats.