Elon Musk sells US$1.1 billion of Tesla stock after holding a Twitter poll on whether to sell 10 per cent of his company

The world’s richest person on November 8 exercised 2.15 million options at a price of US$6.24 per contract, according to a regulatory filing Wednesday. He subsequently sold 934,000 shares to collect about US$1.1 billion.

The shares were sold “solely to satisfy the reporting person’s tax withholding obligations related to the exercise of stock options,” the filing said. It also showed that the transactions were made based on a prearranged trading plan adopted in mid-September.

The contracts, which came from a stock option award Musk received in 2012, were set to expire in August of next year, meaning he would have had to exercise them before then. Exercises of such contracts trigger income taxes, which usually are covered by immediately disposing of some of the newly acquired shares.

At companies with a loyal following, like Tesla, executive share sales tend to draw scrutiny by fans and critics alike. Musk, who earlier this year had said he would likely exercise the options in the near future, may have avoided potential criticism by launching the poll.

Still, the headline-grabbing event pummeled Tesla stock on Monday and Tuesday, wiping out US$50 billion from Musk’s net worth. Tesla rose 4.3 per cent on Wednesday to close at US$1,067.95, paring losses this week to less than 13 per cent. After the disclosure, the stock rose more than 2 per cent in post-market trading.