Tesla stock falls as Elon Musk vows to sell 21B stake after Twitter poll

Tesla shares plunged Monday morning after CEO Elon Musk sold 10 percent of his stake, or some $21 billion â€" keeping his promise to obey the results of a Twitter poll.

Stock in the electric car company was exchanging hands at $1,158 per share as of 6:40 a.m. ET, down more than 5 percent from its Friday closing price of just over $1,222.

The fall comes after Musk â€" worth an estimated $338 billion, mostly in Tesla stock â€" asked on Twitter whether he ought to sell a major stake in the electric car company.

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?” he asked Saturday alongside a poll.

The world’s richest man, who has some 62.5 million followers on Twitter, gave users the option to vote “Yes” or “No” and vowed to follow the outcome of the poll.

Following Musk’s poll, shares of Tesla were down 5.5% to $1,155 at 5 a.m. ET Monday.

More than 3.5 million people responded, and almost 58 percent voted in favor of the sale. Musk has not said when exactly he might sell his tranche.

Dan Ives, managing director at Wedbush Securities, said that many on Wall Street already expected Musk to sell 5 percent or 6 percent of his stake in Tesla this year.

He added that 10 percent is a “higher amount that could surprise some investors but ultimately it’s a digestible number we are not overly concerned about.”

Note, I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.

â€" Lorde Edge (@elonmusk) November 6, 2021

In the weeks ahead of Musk’s poll, Tesla stock rallied to fresh highs, buoyed by record third-quarter earnings and the announcement that car rental company Hertz is ordering 100,000 Tesla cars for its fleet.

Musk has repeatedly said he does not take a salary from any of the companies he runs and is only compensated through stock options, and thus he doesn’t pay any personal income tac until those options are exercised and he decides to sell his stake.

The huge stock awards, which were outlined in a shareholder-approved contract, have made Musk the single largest shareholder of Tesla with a stake worth more than $200 billion.

The largely tax-protected wealth has also made Musk the target of attacks from leftist politicians who say the American tax system needs to be overhauled to make sure mega-billionaires like him pay their fair share.

“Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the Billionaires Income Tax,” Sen. Ron Wyden, a Democrat from Oregon and chairman of the Senate Finance Committee, said Saturday in a tweet.

Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the Billionaires Income Tax. https://t.co/KFHw3VZ45H

â€" Ron Wyden (@RonWyden) November 6, 2021

Musk shot back with characteristic obscenity, “Why does ur pp look like u just came?” he asked, apparently referring to the senator’s profile picture.

Musk has previously offered more substantive defense of his lack of tax payments, saying that critics don’t understand the situation and that he has relatively little cash to pay taxes with.

In September, Musk said at the Code Conference in California that he’ll pay a marginal tax rate of more than 50 percent when his Tesla stock options expire. He added at the time that he was already planning to sell, starting at the end of this year.

Elon Musk shared at a conference in September that he was already planning to sell several expiring stock options.REUTERS

“I have a bunch of options that are expiring early next year, so … a huge block of options will sell in Q4 â€" because I have to or they’ll expire,” he said at the conference.

Musk’s Twitter poll comes amid a national debate over taxation, and whether the system should be overhauled to target billionaires whose wealth is tied up in stocks.

Last month, Democrats proposed a plan to tax billionaires’ unrealized gains, a major proposal that would fundamentally reshape US investing and entrepreneurship.

Musk, who would have been among the most affected by the overhaul, quickly attacked the plan, which has since died.

Source: NYPOST

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