Elon Musk has sold about $1.1 billion (£820 million) worth of Tesla shares to cover tax obligations, the billionaire reported in filings on Wednesday.
Mr Musk, Tesla’s chief executive, exercised options to acquire nearly 2.2 million shares in the carmaker and then sold about 934,000 shares – about 0.5pc of his Tesla holdings.
The move gives Mr Musk cash to pay for the tax bill associated with the exercising of the options, given that his wealth, calculated by Forbes at $281.6 billion, is tied to his stake in Tesla.
The sale also spares him the capital gains tax bill that he would have had to pay had he sold the shares without coupling their divestment with the exercising of the options.
The electric car maker’s stock rose 2pc after the bell on the news, helping to offset a multiday sell-off that had endangered the company’s position in the $1 trillion club.
Mr Musk on Saturday polled Twitter users about selling 10pc of his stake, setting off worries that such a sale could hurt Tesla’s share price. In Wednesday’s trading session Tesla recovered 4.3pc to $1,067.95.
The filings reveal that Mr Musk knew some of his shares were slated for sale this week.
In its filing, Tesla said Mr Musk sold shares on Monday to satisfy tax withholding obligations related to exercising stock options to purchase 2,154,572 shares at $6.24, a huge discount from Tesla’s closing share price of $1,068 the same day.
He then sold 934,091 shares at prices ranging from $1,135 to $1,196.
While Tesla has lost close to $150 billion in market value this week, retail investors have been net buyers of the stock. Some 58pc of Tesla trade orders on Fidelity’s brokerage website on Wednesday have been for purchases, rather than sales.
Retail investors made net purchases of $157 million on Monday and Tuesday, according to Vanda Research.
Tesla is now up more than 51pc in 2021, thanks largely to an October rally that was fueled by an agreement to sell 100,000 vehicles to rental car company Hertz.