I’ve been keeping tabs on the potential for Elon Musk to sell shares in Tesla and generally speaking I’ve been right.

Now comes the difficult part…figuring out whether the selling continues.

Here are the numbers as I have them.

Elon currently owns including options 627M shares of Tesla

Of which 450M are shares and 177M are options.

In November 2021 he exercised 25M (75 split adjusted) stock options at an exercise price substantially higher than the current market price. Since he paid income taxes on those at the time, he will now recognize a capital loss on those shares if he were to sell.

Based on market prices at the time, the 25M had a basis of around 975-1000 (not split adjusted

In April he sold 9.6M shares (split adjusted 28.9M). The realized price (not split adjusted) was on average 869. This would imply a capital loss of around 1.25B if the basis was 1000

In August he sold 7.9M shares (split adjusted 23.7M). The realized price was also on average 869. This would imply a capital loss of 1B.

So using split adjusted numbers. He had 22.4M he could sell at a big capital loss to loss harvest prior to his November sales. Which amounted to 19.5M shares so far. Assuming that he is selling from his freshest batch of options again…these would have created a capital loss of 2.5B.

So where to we stand. Elon could sell another 3M shares to recognize capital losses…before having to sell shares to recognize capital gains. Assuming a similar share price he would likely be at about 3B in capital losses

If he decides he wants to use those capital losses to sell more of his original shares which have essentially 0 cost basis at this point due to the appreciation of the company, he would be able to raise another 3B in funds essentially tax free.

To date his sales have generate 19.2B in tax free cash. Of course his 44B dollar acquisition of Twitter is going to consume that cash. Considering his outside equity was only 7B, he will be on the hook for 37B. Of which 13B is debt he’s taking on for the company, 12.5B was supposed to come from a margin loan which it’s unclear if that came from his existing pledged line (value of 13.2B as of 3/31/2022) or if he’s added to that amount .

That would leave 11.5B unaccounted for. As seen here he’s raised far more than the 11.5B. Which to me suggests this cash also is intended to lower his debt load.

Assuming he’s footing the primary bill on both Twitter’s debt (which is junk rated) along with his own margin loan…his interest bill is likely to be between 2-3B annually.

He gets 0 cash salary, and Twitters ad revs are disintegrating before we speak.

So I suspect he’s not done selling. At least 3.3B more worth of shares is what I suspect he’ll sell.