Is selling shares the best choice for Elon Musk?

Smart Jerry wrote a column · Nov 15, 2021 00:53

Last week, Elon Musk sold about $6.9 billion worth of $Tesla (TSLA.US)$ shares. And those sales made Tesla shares decline 15.4% in one week.

We tried to find the real reason for Musk's sales last week. However, is selling shares the best choice for him?

The answer is NO.

One of the main reasons Musk is selling shares is because he needs the cash. But he can raise cash by selling options or selling shares.

1. Selling shares isn't the best way.

If Musk sells 10% of all his shares as promised, he can raise about $914 million after tax and 176 million shares will be left. The total taxes for him are around $17 billion.

2. More cash will be received if he chooses to sell his options.

If Musk chooses to sell 3/4 of his options, he can raise $5 billion after tax and still 176 million shares left.

He chose the first way last week.

Different scenarios are shown below:

Source: Twitter@heydave7

Musk replied this on Twitter.

He knew the best way but he didn't do so.

Is selling shares the best choice for Elon Musk?

Anyway, we gotta say he is a special person indeed.

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