Tesla stock price drops as Elon Musk sells $1.2 billion worth of stock

Tesla founder and CEO Elon Musk announced in October that the company would move its headquarters from Silicon Valley near San Francisco to Austin. The price of Tesla stock fell Friday as Musk sold millions of his shares in the company. Photo courtesy of Tesla

“There’s been a lot of talk lately about unrealized gains being a tax avoidance tool, so I’m proposing to sell 10% of my Tesla stock,” the famously irreverent CEO said in a statement. the tweet to his more than 60 million followers.

Fifty-eight percent said they should sell. Within days, Tesla saw its share price drop 12%.

Selling Tesla’s stock price was still down 15.4% for the week, reports CNBC. The drop makes it the company’s worst stock performance in a week, not counting the sharp declines that markets saw at the start of the coronavirus pandemic. However, the company’s stock is still up 46% from a year ago.

Over the course of the week, Musk sold a total of 6.4 million of his shares in the company, valued in total at $6.9 billion. reports CNN. However, CNN reports that Musk is more likely to have made the sale due to a nearly $10 billion tax bill he faces in connection with the exercise of stock options. Musk remains Tesla’s largest shareholder, and the sale represents less than 4% of the shares he directly owns.

Musk said earlier in September that he would sell shares in the fourth quarter, raising his marginal tax rate to more than 50%. reports CNBC.

Those sales had an impact on the company’s stock price. Tesla stock fell 15.4% for the week, marking the company’s worst one-week performance in 20 months. It was also the worst week for Tesla stocks on record, with the exception of declines in February and March 2020 as the coronavirus pandemic sent markets crashing.

Tesla shares are still up about 46% so far after a record closing price of $1,229.91 on November 4, 2021.