Elon Musk offloads more Tesla shares as company loses its $1tn valuation

World’s richest person has sold $12.7bn worth of stock over five weeks

Tesla's valuation has fallen below $1 trillion for the first time in two months. AP

Elon Musk, co-founder and chief executive of electric vehicle maker Tesla, sold another 934,091 shares of his car company worth about $906.5 million, a filing with the US Securities and Exchange Commission showed.

This move apparently cost the California-based carmaker its $1 trillion market capitalisation mark. The current market cap of the company is about $947.3 billion, bringing it below the $1tn mark for the first time since October 25.

Tesla joined the $1tn market capitalisation club in October as the company’s stock surged to a high of more than $1,000 a share nearly 11 years after the company went public.

Elon Musk, the wealthiest person in the world with a worth of $253.6 billion, was on Monday named 'Person of the Year' by 'Time' magazine. AFP

The company’s stock dropped more than 2.7 per cent to about $940 a share at 11.30am in New York on Tuesday.

In the SEC filing, Mr Musk has also exercised stock options to buy 2.13 million shares of Tesla at the strike price of $6.20 per share granted to him through a 2012 compensation package.

Mr Musk, who has added about $98bn to his fortune this year, has sold almost $12.7bn worth of stock over the past five weeks.

Last month, the majority of Mr Musk's 62.8 million Twitter followers voted in a poll that he should sell 10 per cent of his Tesla holdings.

Now, he has sold approximately 70 per cent of the stock he would need to offload 10 per cent of his direct share ownership.

As of June 30, Mr Musk held about 170.5 million shares of Tesla, valued at almost $163bn (based on today’s price). His 10 per cent shares will be worth nearly $16.3bn.

He proposed this move in a tweet citing discussions about wealthy people hoarding unrealised gains to avoid paying taxes.

Mr Musk was calling into question the Democrats' “billionaires' tax”, which seeks contributions from America's most affluent by taxing their “tradable assets".

The proposed tax is expected to help fund US President Joe Biden’s ambitious social policy and climate change legislation.

At the 2021 Code Conference in September, Mr Musk revealed that he intended to sell a huge portion of his stock in the fourth quarter. In the same month, he established a pre-arranged trading plan to carry out “an orderly sale of shares related to the exercise of stock options”, filings show. However, the November 6 Twitter poll did not disclose the existence of that plan.

Mr Musk — who the Bloomberg Billionaires Index says is the wealthiest person in the world with a worth of $253.6bn — was on Monday named “Person of the Year” by Time magazine.

Dogecoin jumped jumped more than 20 per cent to a high of $0.20 on Tuesday morning. Reuters

Separately, in his latest series of tweets supporting cryptocurrency, Mr Musk on Tuesday said Tesla will accept payment in Dogecoin for some of the company’s goods.

“Tesla will make some merch buyable with Doge & see how it goes,” Mr Musk said on Twitter.

The meme-inspired cryptocurrency, featuring a picture of a Shiba Inu dog, jumped more than 20 per cent to a high of $0.20 on Tuesday morning after Mr Musk’s tweet.

In March, Tesla announced accepting Bitcoin as payment for its cars but reversed course in less than two months, citing “environmental concerns".

However, in June, he said his electric car company will resume accepting the world’s biggest cryptocurrency once its miners start using clean energy.