Photo: Tesla
On November 6, 2021, Elon Musk asked his 62.5 million followers on Twitter if he should sell 10% of his shares to pay taxes. On November 5, his brother Kimbal sold $109 million in stock. The SEC (U.S. Securities and Exchange Commission) allegedly does not think that’s a coincidence and will investigate both Tesla shareholders.
The WSJ (Wall Street Journal) published the information on February 24. Curiously, Elon Musk accused the SEC of leaking confidential information to the press days before the article was published. In an interview with CNBC on February 22, the Tesla CEO said that the American newspaper asked Musk about it before SEC contacted him to inform about the investigation.
Although Musk made the public consultation about selling some shares, it was already certain since at least September 2021. Musk said at the Code Conference that he would sell “a huge block” of his options in the fourth quarter. If that was not enough, the plan was also included in a 10b5-1 form from September 14, 2021. Submitting these plans allows company insiders to schedule trades in their own company’s stock.
The “coincidence” relates to the fact that the documents did not set a date for these options sales to happen. SEC allegedly started its investigation because it thinks it is very difficult to believe that Kimbal Musk sold his shares one day before Elon Musk shared on Twitter the possibility of selling his without learning his brother would do so. Proving that this was the case will undoubtedly be challenging for the commission.
So far, neither the SEC nor Elon Musk commented on what WSJ anticipated. Until any of them do that, what we have are strong elements to believe that this is really the case. The WSJ would never publish an article about that without confirming it with more than one source. We’ll keep an eye on SEC’s press area to bring you the official confirmation of the investigation as soon as it emerges.
Although Musk made the public consultation about selling some shares, it was already certain since at least September 2021. Musk said at the Code Conference that he would sell “a huge block” of his options in the fourth quarter. If that was not enough, the plan was also included in a 10b5-1 form from September 14, 2021. Submitting these plans allows company insiders to schedule trades in their own company’s stock.
The “coincidence” relates to the fact that the documents did not set a date for these options sales to happen. SEC allegedly started its investigation because it thinks it is very difficult to believe that Kimbal Musk sold his shares one day before Elon Musk shared on Twitter the possibility of selling his without learning his brother would do so. Proving that this was the case will undoubtedly be challenging for the commission.
So far, neither the SEC nor Elon Musk commented on what WSJ anticipated. Until any of them do that, what we have are strong elements to believe that this is really the case. The WSJ would never publish an article about that without confirming it with more than one source. We’ll keep an eye on SEC’s press area to bring you the official confirmation of the investigation as soon as it emerges.
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