Technology

Tesla shares fall as the sell-off accelerates

tesla-shares-fall-as-the-sell-off-accelerates

Pavlo Gonchar | LightRakete | Getty Images

Tesla stock was down as much as 11% in midday trading on Tuesday, adding a second day to losses after CEO Elon Musk proposed selling 10% of its shares in the electric vehicle business over the weekend.

The decline is expected to be the largest of the year for the stock, coming after a nearly 5% decline on Monday, mitigating a mostly uptrend for the year. Overall, Tesla shares rose more than 47% in 2021, more than doubling year over year as the company reported improved automotive margins and tackled a chip shortage to ramp up production while competitors stalled .

Current and former board members including Chairwoman Robyn Denholm, Elon Musk’s brother Kimbal Musk, Ira Ehrenpreis and Antonio Gracias have dumped hundreds of millions of dollars in Tesla stock since October 28 after Tesla’s market capitalization surpassed $ 1 trillion.

Musk was honored with a hefty package of options as part of a CEO performance plan in 2012. Since he doesn’t receive a salary or cash bonus, his fortune comes from these stock bonuses and Tesla’s price gains. The 2012 grant was for 22.8 million shares at an exercise price of $ 6.24 per share. These expire on August 13, 2022.

He also has additional options from an unprecedented 2018 CEO salary package.

The iconoclastic CEO has mortgaged at least 92 million of his Tesla shares to lenders for borrowing. As CNBC previously reported, Musk may want to sell some shares to pay off his debt and faces a potential tax liability of $ 15 billion if he exercises his options and sells shares.

This story evolves. Please check again for updates.

–Yun Li contributed to this story

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