Elon Musk says he’ll sell 10% of his Tesla stock based on a Twitter poll

Silver Spring: Tesla shares fell nearly 5% on Monday after CEO Elon Musk said he would sell 10% of his stake in the electric carmaker, which is estimated to be worth more than USD 20 billion based on the results of a poll he conducted on Twitter over the weekend.

According to Wedbush Securities analyst Daniel Ives, Musk owns approximately 23% of Tesla stock and will owe approximately USD 10 billion in taxes on stock options that will vest next summer.

Musk’s fortune is largely comprised of Tesla stock, which does not pay him a salary in cash. “I only own stock, so the only way for me to pay taxes personally is to sell stock,” Musk wrote on Twitter.

Many on Wall Street expected Musk to sell closer to 5% of his stake, according to Ives, but even doubling that figure doesn’t worry him or his company. It’s better to “rip the Band-Aid off now” and avoid speculation, according to Ives.

“With Musk & Co. leading the way, Tesla remains in pole position to drive this EV adoption curve to the next level both domestically and globally,” Ives wrote in a note to clients.

Tesla has been on a roll lately. As of Friday, the stock had gained more than 40% since last month, when the company announced a record third-quarter profit.

Tesla shares closed at an all-time high of USD 1,229.91 per share last week. With a market capitalisation of more than USD 1 trillion, it is the most valuable carmaker in the world. The stock dropped 4.8% to USD 1,162.94 on Monday. It is still up nearly 66% for the year.

Musk, whose net worth is estimated to be around USD 300 billion, said he proposed selling the stock because some Democrats have been pushing for billionaires to pay taxes when the price of the stocks they own rises, even if they don’t sell any shares.

The language on unrealized gains, also known as a “billionaires tax,” was removed from President Joe Biden’s budget, which is still being negotiated.
“Because much has been made recently of unrealised gains as a means of tax avoidance, I propose selling 10% of my Tesla stock,” he tweeted Saturday afternoon. “Do you agree with this?”

Musk stated that he would follow the results of the poll, which concluded with 58% of more than 3.5 million votes urging him to sell the stock. He didn’t say when he planned to sell the stock.

Musk is well-known for roiling markets with his occasionally flippant and ill-advised tweets. Tesla shares fell more than 3% last Tuesday after Musk tweeted that a deal to sell 100,000 Teslas to Hertz had not yet been signed. Hertz stated that the vehicles had already been delivered.

Musk’s recent Twitter poll, according to Ives, is “another bizarre soap opera that can only happen to one company and one CEO in the world, Musk.”

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