Elon Musk still holds more and more Tesla shares

 Elon Musk still holds more and more Tesla shares

Thanks to stock options, by the end of last year, Elon Musk still owned more Tesla shares than 2020 despite selling $22 billion.

According to a filing with the Securities and Exchange Commission (SEC) earlier this week, Musk sold $16 billion of company stock last year. Along with that, he donated 5 million shares, worth nearly $6 billion to an undeclared recipient in November 2021. Total stock sales and giveaways last year were worth nearly $22 billion.

However, even with so many transfers, he still owns a larger stake in Tesla, thanks to the income package here. With stock options, Musk actually ended 2021 with a larger share of ownership — and more shares.

Elon Musk visits the construction progress of Tesla factory in Gruenheide, Germany on May 17, 2021. Photo: Reuters

Elon Musk visits the construction progress of Tesla factory in Gruenheide, Germany on May 17, 2021. Photo: Reuters

In 2012, Musk was given the option to buy 22.8 million shares worth about $28 billion. Last fall, he began converting 22.8 million options into shares. Options are priced at only $6.24. So he could pay $6.24 per option and get one Tesla stock, which was trading at over $1,000 at the time.

With each option conversion, Musk will simultaneously sell the stock to pay taxes. So even having to sell off billions of dollars of Tesla stock to pay taxes, he is actually accumulating an even larger amount, thus increasing his ownership.

In total, Musk sold 15.7 million shares for $16.4 billion. Along with the donated shares, he sold a total of 20.7 million shares. However, he earned 22.8 million shares through options, giving him another 2 million Tesla shares by the end of the year. He currently owns 172.6 million shares, giving him a 17% stake in the company, making him the sole single largest individual shareholder.

Billionaire Elon Musk started moving with his stocks with a poll on Nov. 6. He wrote: "Recently the majority of unrealized gains have been attributed to tax avoidance, so I propose to sell 10% of my Tesla stock. Do you support this?"

Musk promised to follow through with the results of the poll, which found 58% in favor of the sale and 42% against. In the end, he fulfilled his promise to sell 10%. But actually, he made even more money with options. By going around by selling 10% stock and converting options, he fulfilled his tax liability while keeping a larger stake in the company.

It is expected that Musk's ownership - and a fortune of $227 billion - is likely to soar. His next big income package is predicted to be bigger than the one launched in 2012, which is due to expire in 2028.