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It seems possible, maybe even likely, that he’s put at least some of the money into SpaceX, the other company of which he is CEO and primary shareholder.
Musk sold 10.3 million of the shares on the same days he exercised options to buy an additional 22.9 million shares of Tesla stock. The sales took place on 11 separate days spread out from November 8 through December 28.
Musk sold shares immediately after exercising the options, with the SEC filing noting that the transactions were made “solely to satisfy the reporting person’s tax withholding obligations related to the exercise of stock options.”
But not all of them.
The most recent sales included the notation that 219,000 shares that were sold on December 28 were “solely” to cover his tax bill. Another 715,000 shares he sold that same day, which netted Musk $776 million, went “partially to satisfy” his tax bill, according to the filing.
The next day, SpaceX made its own filing with the SEC, disclosing that it had raised $337.4 million in new equity investment from an undisclosed investor.
And this isn’t the first time this year that a Musk sale of Tesla shares for purposes other than paying taxes was closely followed by SpaceX reporting a new infusion of equity investment.
From November 9 through 11, Musk sold 5.4 million shares, raising $5.8 billion. Those were shares he held in a trust, not shares he had just acquired as part of the exercise of options. And while his tax bill is likely much smaller on the sale of those shares, it’s still substantial – about $1.2 billion in federal long-term capital gains taxes, leaving him with about $4.6 billion.
There’s no indication in the filings as to why he completed those sales, which mark the first time he has sold shares that he has held for an extended period, rather than those he just acquired through the exercise of options.
On November 15, a few days after he made that unusual sale of shares from his trust, SpaceX disclosed it had raised $388 million in additional equity investments from an undisclosed investor.
That cash infusion arrived at an important time.
In an email sent to SpaceX staff just before Thanksgiving, Musk reportedly warned that the company was facing a cash crisis due to problems developing the Raptor rocket engines and Starship rockets needed to launch its Starlink satellites in 2022. Starlink is a constellation of satellites designed to provide high speed Internet service from orbit.
He also said the company planned to ramp up production of ground stations needed to connect Starlink customers to the Internet. He said it would be making “several million units per year,” which he said will “consume massive capital.”
SpaceX and NASA also did not respond to questions from CNN Business about the email to SpaceX staff.
SpaceX raised $1.2 billion in equity investments earlier this year, before these two most recent capital infusions. While the names of whomever purchased those additional shares are not public, the amounts of four separate infusions were disclosed in filings with the SEC.
It’s not clear how much cash Musk had available to him to invest in SpaceX before he started selling his Tesla shares on November 8.
The reported email to SpaceX staff right before Thanksgiving is not the first time Musk discussed the financial challenges and cash drain involved in getting Starlink’s internet service up and running.
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