Tesla shares had its biggest drop in more in eight months after Elon Musk’s Twitter followers voted for him to sell 10 percent of his stake in a poll organized by the businessman.
The majority of the 3.5 million Twitter users, 58 percent, said they would support such a sale in a Twitter poll Musk conducted over the weekend.
Participation would be valued at about $ 21 billion based on the 170.5 million Tesla shares he owns.
“I was willing to accept either of the two results,” Musk said in a tweet after the survey closed.
Shares of Tesla fell as much as 7.3 percent on Monday, their biggest intraday decline since March 5. For now, the value of the securities falls 2.75 percent, to $ 1,188.
The shares were up 73 percent this year through Nov. 5, while the S&P 500 was up 25 percent.
His quirky poll is the latest example in Musk’s long history of using Twitter and his legions of fans on the platform. to spark interest in your company, sometimes pushing the limits with ironic tweets. The world’s richest person proposed the measure in a tweet citing recent discussions about the ultra-wealthy who accumulate unrealized gains. to avoid paying taxes.
Musk does not receive a salary, but he does have to pay taxes on the stock options he exercises.
Musk’s tweets have moved Tesla’s stock in the past, sometimes provoking the ire of the authorities. In 2018, Musk agreed to obtain approval from a Tesla attorney before disclosing material information to investors as part of an agreement with US securities regulators. It was unclear if that official previewed Musk’s Twitter poll.
While big sales are often seen as a negative sign, one of this size won’t significantly alter Tesla’s story, said Dan Ives, an analyst at Wedbush Securities. The demand for Tesla shares still high among institutional and retail investors, he added.
Shares of the automaker have soared 73 percent this year to $ 1,222.09 through Nov. 5, giving the company a valuation of $ 1.2 trillion. The number of shares that Musk, its CEO and largest shareholder, could sell is equivalent to 80 percent of Tesla’s average daily trading volume in the last three months. The number of shares you could potentially sell would be even higher if your options were included.
The numbers of the richest man in the world
Musk’s fortune is $ 338 billion, according to the Bloomberg Billionaires Index. About a quarter of that consists of Tesla stock options that you can exercise at any time. The values come from two awards he received in 2012 and 2018. The oldest contracts expire in August of next year.
If you exercised all options now and immediately sold the stock, the move would bring you $ 95.9 billion before taxes.
Musk may be stating that wants liquidity beyond the cash that is insured by borrowing against your stakes in the electric vehicle maker. Last week he suggested that he would sell some shares if the UN can show that $ 6 billion can help alleviate world hunger. For years, Musk has said he would be the last to sell shares and has often increased his position when Tesla has raised money from Wall Street so that his stake is not diluted.
Musk moved to Texas, which has no state personal income tax, in late 2020, but as Tesla’s market value and personal wealth have skyrocketed, Musk has become a symbol of growing inequality, something to which it seems to be sensitive. He was one of the billionaires mentioned in an investigation into how the ultra-rich avoid paying taxes and has become the target of members of Congress who are pushing for a billionaires tax.
“Whether or not the richest man in the world pays taxes shouldn’t depend on the results of a Twitter poll”US Senator Ron Wyden, a Democrat from Oregon, tweeted. “It’s time for billionaires’ income tax.”
On his way to becoming the richest person in the world, Musk has made millionaires, and even at least one billionaire, some of his fans, employees, and other investors. Among them is Leo KoGuan, a Singapore-based retail investor and business owner who used his already considerable wealth to amass more than $ 7 billion in Tesla stock.
Count KoGuan among the Twitter followers who say it’s time for Musk to get some money out of the automaker, even if it’s just to be used by other Musk ventures exploring space and neural networks.
“Politically and fiscally and since Elon is cash poor, he has no choice but to sell his holdings to pay taxes and be cash rich,” KoGuan posted on November 6.