This was likely done to keep Musk from being stock on the market at a reduced price prior to purchasing the remaining needed shares at the prior price, thus lowering his overall costs. It's a tragedy of the commons situation where any individual shareholder would be incentivized to sell early. It's understandable why they did it, but really insider trading (like most other rules) is over-enforced on the masses and selectively not-applicable to those who wield power.
This makes no sense at all because this action does nothing to prevent Musk from buying shares, and if the deal is known to be closing, then employees have no incentive to sell early.
GM Finance used to have a deal where they'd virtually sell your locked-out shares in anticipation of a market bump after the lockout. Is that still a thing?
I don't know what they are talking about specifically, but 17 CFR 240.10b5 1(c)(1) allows insiders to adopt "trading plans". This is basically where you give someone else binding instructions ahead of time on how to trade (e.g. sell X units when price reaches $Y) – trades made under such a plan can be exempted from "no trade" periods around results time and major announcements.
I think most US publicly listed firms use them, but usually only for senior executives; I don't think there is any reason in principle why a firm couldn't make them available to all employees.
