Elon Musk JUST Sold his Shares

hey everyone me kevin here it's official

elon musk has begun selling shares of

tesla stock let's get right into what's

going on quick mention though this video

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a moment so folks elon musk was

assigned way back in 2012 or awarded i

should say

22.8 million shares of tesla at a strike

price of six dollars and 24 cents and

the way stock-based compensation works

is that if you get awarded stock options

that vest at a certain point in the

future you either exercise them to take

the shares or you lose them you

obviously don't want to lose them so

you're going to exercise them but the

problem with that is if the stock for

example is selling for twelve hundred

dollars and your options have a strike

they're kind of like call options they

have a strike of six dollars and 24

cents

when you receive the shares for six

dollars and 24 cents you are going to

have to pay taxes on the difference here

that's because this is a form of

compensation now elon musk i'm not sure

if he's going to have to pay these taxes

as a quarterly this year or he'll have

if he'll have to pay them uh in in on

april 15th or if he's going to go on

extension next year to pay them so he

might be able to play with the money or

just get rid of the tax bill just pay

the tax bill now and get it over with

that's also a possibility who knows

maybe in the meantime he'll throw his

money into bitcoin that'll just be

speculation though but elon musk has to

pay taxes on this difference so that

would be in this case about eleven

hundred ninety three dollars and seventy

six cents that he would have to pay uh

in uh intel well taxes on and so taxes

on this would probably be somewhere in

the neighborhood of 45 percent uh

possibly closer to 50 just depending on

his tax situation and uh exactly where

his domicile is i believe he's in texas

now uh but i don't know if he's been

there the full year so that's obviously

going to depend since he just moved from

california but anyway the point is he's

going to have to pay a lot of taxes on

11 93 in gains in this example i think

he's sold for slightly less than this so

probably a little less than this but the

point is he's gonna have to pay taxes on

this so elon musk knows that he can

borrow money he could take out a margin

loan basically a loan against his stake

in tesla or he could sell shares to

cover his tax liability we expect that

his tax liability would be somewhere

between 13 to 14 billion dollars

and if tesla sells somewhere around 10

of his tesla holdings he would get

somewhere around

28 billion dollars

but he would probably also have to pay

taxes on a substantial portion of that

28 billion dollars so you'd probably

have to pay another let's say 14 billion

dollars and this shows you how literally

his full 28 billion dollars could

potentially be going to taxes so the

portion that he sold the 28 billion

dollars that he potentially sold that's

about 10 percent to cover uh the taxes

he has on his options but then also the

taxes on the shares that he sold so

potentially all that money is going to

taxes now he's still going to be way up

i mean consider this 22.8

million shares of tesla hey siri 22.8

million times eleven hundred

second here

25 billion

eighty million yeah so basically really

what he's doing here is it's like he

liquidated approximately 28 billion

dollars

paid that all in taxes to cover taxes on

his options that he got and then he got

the shares right back via options it's

brilliant but what's even more brilliant

is he branded it as if he let twitter

decide that for him obviously if you're

going to put on twitter hey should i pay

more in taxes you're probably going to

end up paying more taxes right but

anyway elon musk just filed his first

form s4 we expect that there's going to

be another one tomorrow because remember

you have two days to file the form i'm

going to show you the form to show you

when he sold but uh quickly i just want

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now let's go on back over to these sec

forums so take a look at this this is

one of the first of two sec forms filed

by elon musk and this shows that we've

got about 930

000 shares that were sold and they were

sold anywhere from

1196 dollars down to 1176 on this

particular sheet and on this sheet we

see a lot of shares sold between 1175

and

11.35 so these shares were sold between

11 35

and 11.96

at the higher price on monday we have

options here of 2.1 million shares that

were acquired and this is just a

fraction of the total options that elon

musk has remember elon musk has the

right to acquire 22.8 million shares and

uh this is only a sale of 934 000 shares

so given that we when we look at what

kind of happened in the stock in tesla

stock it looks like a lot of these sales

were done

on tuesday which is kind of what we

expected which elon musk has until the

end of the day tomorrow to file this sec

form four to disclose that he so that he

did sell the rest on tuesday if he

indeed did but take a look at this if we

go to the five-day chart here the first

big drop that we get is on monday when

the stock drops about five point nine

five percent first batch of elon musk

selling you could see the prices around

1161 1140 uh going down to 1148 intra

minute you know or intra hour went down

to 11 35 and lower and then tuesday we

had significantly more volume and that's

when we fell about 12 on the day now

today tesla stock is actually up 4.34

potentially implying that the selling is

done so what we have is an indicator

that the first batch of selling was done

here the second batch is selling we're

sure of this we have a disclosure of

this only about five percent of the

shares were actually sold on this date

but uh on tuesday we expect the rest of

the shares were sold because look at the

volume folks the average volume for

tesla before this crazy run was

somewhere around 13 to 20 million shares

per day well if you go to

monday you get

33 million shares of volume which is a

substantial uptick from just friday

before that at 21 million or the day

before that at 25 million so substantial

uptake at 33 million you'd expect a lot

of media enthusiasm went into

potentially selling tesla stock ahead of

elon as well though and then the very

next day we had 59 million shares of

volume which is almost double the normal

volume so it kind of makes sense that if

elon was going to be selling around uh

10 of a stake or maybe around 28 million

shares which is roughly what he was

getting in stock options that tuesday

was probably the day remember he's

getting 22.8 million shares uh in in

stock options 28

20 i'm sorry 22.8 million shares 28

billion dollars worth okay so 22.8

million shares it makes sense because if

we remove all of that extra volume from

tuesday's volume of 59 we'd get to about

31 million

uh of of share volume which would kind

of be right in line of what we've seen

in prior days

uh and certainly still elevated from uh

prior weeks because we've been on this

sort of euphoric run so bottom line elon

musk has started his selling sold about

five percent of what he committed to on

monday we expect that the rest was done

on tuesday we will get the final form

for

probably tomorrow afternoon uh this is

very good news though keep in mind that

the stock market is closed tomorrow

though so that means no course member

live stream unfortunately for all of

those of you in the stocks and

psychology and money group or any of the

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link down below we'll see you again on

friday folks thank you so much for being

here enjoy veterans day tomorrow and

we'll see you next time

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