Tesla registered some stock for CEO Elon Musk. That doesn't mean he is going to sell it. Eventually, the taxman will come.
Tesla shares fell 3% in morning trading.
Friday, Tesla filed forms with the Securities and Exchange Commission registering about 304 million shares of common stock relating to Musk's 2018 pay award.
Tesla shareholders voted to award the often-debated options in 2012. A Delaware judge voided the award in 2024, citing inadequate shareholder disclosures. Shareholders reauthorized the award in 2024, which didn't change the judge's mind. Ultimately, the Delaware Supreme Court sided with Tesla in 2025, keeping Musk's stock options intact.
To earn the award, Tesla essentially had to become worth $650 billion. Tesla was worth closer to $70 billion at the time. Today, it's valued at $1.7 trillion, based on its fully diluted share count, which includes Musk's options.
Tesla shareholders voted to award Musk restricted stock in 2025 that would be worth roughly $1 trillion if all performance incentives are met. Currently, Musk's stakes in SpaceX, Tesla, and his other companies are worth close to $800 billion.
Registering the 2018-related stock just means that, when Musk exercises the stock options under the 2018 award, the shares will be freely tradable.
Eventually, Musk will have to exercise the options. They expire in early 2028. When he does, there will likely be some sales for tax purposes. Musk sold stock in 2021 after exercising options related to his 2012 pay award. Sales are driving additional volatility in Tesla's shares.
Coming into Monday trading, Tesla stock was down 16% this year and up 32% over the past 12 months. Shares fell 6.1% this past week after Tesla reported first-quarter results. Bottom line profits beat expectations, but the rollout of Tesla's robo-taxi service is going slower than investors expected.
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