Elon Musk Offers to Take Huge Risk Based on the Results of a Twitter Poll
Tesla shares slumped more than 6 percent at the opening bell Monday after CEO Elon Musk said he would sell 10 percent of his holdings in the electric car maker — more than $20 billion worth by most calculations — based on the results of a poll he conducted on Twitter over the weekend.
According to analyst Daniel Ives of WedBush Securities, Musk owns about 23 percent of Tesla’s stock and has about $10 billion in taxes coming due to stock options that vest next summer.
Much of Musk’s wealth is held in shares of Tesla, which does not pay him a cash salary.
“I only have stock, thus the only way for me to pay taxes personally is to sell stock,” Musk tweeted.
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.
— Lorde Edge (@elonmusk) November 6, 2021
Many on Wall Street assumed Musk would be selling closer to 5 percent of his stake, Ives said, but even doubling that number does not cause him or his firm great concern.
Ives said better to “rip the Band-Aid off now” and avoid speculation.
“Tesla remains in pole position to drive this EV adoption curve to the next level both domestically and globally with Musk & Co. leading the way,” Ives wrote in a note to clients.
Last week, Tesla shares hit an all-time intraday high of $1,243.49 per share.
It is the most valuable carmaker in the world with a market capitalization of more than $1 trillion.
Shares fell 6.4 percent to $1,143.95 at the opening bell.
They are still up nearly 60 percent for the year.
The sometimes abrasive and unpredictable Musk said he proposed selling the stock as some Democrats have been pushing for billionaires to pay taxes when the price of the stocks they hold goes up, even if they do not sell any shares.
It is a concept called “unrealized gains,” and Musk is sitting on a lot of them with a net worth of roughly $300 billion.
“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” he tweeted Saturday afternoon.
“Do you support this?”
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?
— Lorde Edge (@elonmusk) November 6, 2021
Musk said he would abide by the results of the poll, which ended with 58 percent of more than 3.5 million votes calling for him to sell the stock.
Musk is known for roiling markets with his sometimes flippant and ill-advised tweets.
Last Tuesday, Tesla shares tumbled more than 3 percent after Musk tweeted that a deal to sell 100,000 Teslas to Hertz had not yet been signed.
Hertz said the cars were already being delivered.
Ives called Musk’s recent Twitter poll “another bizarre soap opera that can only happen to one company and one CEO in the world, Musk.”
The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.
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