With a $ 700 million windfall, what would you do?
That’s what Tesla is for (TSLA) – Get the Tesla Inc report Founder and CEO Elon Musk will face a decision after the electric car maker’s share price rose more than 8% on Monday, ending its market cap at $ 141.1 billion – and enabling Musk to reach $ 700 million – Redeem dollars in stock options.
Tesla’s stock market value reached a six-month average of $ 100.2 billion in 2018, according to an analysis of Refinitiv data.
According to Reuters, Musk has already met two other requirements by hitting a growth target and far exceeding an average market cap of $ 100 billion for a month.
Each tranche gives Musk the option to purchase 1.69 million shares of Tesla at $ 350.02 each. At Tesla’s closing price of $ 761.19, Musk could theoretically sell the shares for a profit of $ 694 million.
Musk, who is also the majority owner and CEO of the SpaceX rocket manufacturer, receives no salary or cash bonus – just options that are exercised based on Tesla’s market capitalization and set milestones for sales and earnings growth.
Musk shocked investors on Twitter on Friday, telling his followers that he believed Tesla’s stock price was “too high,” which pushed the stock price down 10%. Tesla posted its third straight quarterly profit last week, although its business continues to be badly hit by the coronavirus pandemic.
While he didn’t quantify his reasoning for why he thought the price was too high, investors found it odd that he would come out publicly just before the $ 100 billion market cap milestone – and just before advocating his Qualified for $ 700 million.
Tesla shares rose 2.33% in trading on Tuesday to $ 778.93.