Musk sells some stonk, so what?
Good afternoon,
Yes, I’m being clickbaity and will be talking briefly about Elon and baby Kimbal.
Do subscribe and give this a share, buttons below:
How to pay taxes in style
As you may have seen this week, Elon declared that he’ll be selling 10% of his holdings in Tesla - he has followed through with this declaration.
He alluded to the fact that unrealised gains in equity holdings are a way for rich people to avoid paying the taxman.
Musk let the retail traders decide the outcome using a Twitter poll. 58% decided ‘Yes’ for Elon to sell 10% of his holdings.
Of course, it was met with some politicians taking a poke:
Ron has a pretty boring ‘cum-face’ unless he changed it after Elon’s Tweet gained some traction lol. Moving on…
So far this week $8.1bn of Tesla stock has been sold by Elon, you can literally hear the stampede of investment bankers stumbling over each other to get in on this action.
He still needs to sell about 10mn more shares to fulfil his ‘Twitter Pledge’.
All of this to me is only semi-interesting; it’s not out of character for Musk.
What is curious and requires one to look at this situation with suspiciously-raised eyebrows is that Kimbal Musk (Elon’s baby brother) exercised $110mn of stock options in a very timely manner; right before the weekend Elon took to Twitter to decide the fate of his Telsa holdings.
If you take a look at the SEC Form 4 that I’ve dug out and annotated for you, you can see when Kimbal exercises his options and then begins to offload and cash out:
It’s important to note that Kimbal sits on the board for Tesla and is still a major shareholder after his sell-off.
Perhaps the sell-off of both Elon and Kimbal signals a change of attitude towards Tesla’s valuation and that the recent Twitter poll is Elon’s way of blunting potential criticism of cashing out at a time when Tesla’s market cap is simultaneously exuberant and frothy.
With all that said, it is fun to watch.
Watch this stonk Monday morning
It was leaked to Sky News that the board of CMC Markets is flirting with potentially splitting the group into two separate businesses.
Both businesses will still be quoted on the LSE with only one, the legacy business, keeping the name ‘CMC’.
The split will consist of a leveraged trading house and a non-leveraged business.
It’s been Lord Cruddas’ conviction that his firm CMC Markets, which he owns 62.5% of, has been undervalued by the UK public market for quite some time.
From an insider, it is estimated that it will create hundreds of millions of pounds of shareholder value - I’m a bit lost as to how merely splitting the group up will do this. I’m still in the early ages of analysing this company.
Perhaps splitting the group will allow investors to analyse the accounts much more easily, that’s the only thing I can think of.
Either way, it has been well received by retail traders when taking a look at the ADVFN chat this weekend, another favourite place of mine to view stock market debauchery:
Looking around the market, the general consensus is that CMC Markets is the highest quality trading services provider in the UK.
From sniffing around its accounts and looking at its divi yields in the past (which are all over the shop when you look at things taking the average share price), my nose is telling me that the stock is near the expensive level, though this is not to say that CMC isn’t a high-quality company and that I’m correct.
It’ll be interesting to see how the market reacts to this news on Monday morning.
That’s all for this week. Another short one I know, essays are coming in hot now…
See you soon