Musk asks Twitter followers whether he should sell 10% of Tesla stock

FAN Editor
FILE PHOTO: Tesla Inc's Musk speaks during a delivery event for Tesla China-made Model 3 cars
FILE PHOTO: Tesla Inc CEO Elon Musk speaks onstage during a delivery event for Tesla China-made Model 3 cars at its factory in Shanghai, China January 7, 2020. REUTERS/Aly Song/File Photo

November 7, 2021

By Ann Maria Shibu and Hyunjoo Jin

(Reuters) -Tesla Inc Chief Executive Elon Musk on Saturday asked his 62.5 million followers on Twitter in a poll if he should sell 10% of his Tesla stock.

The world’s richest person had previously said he could face a “massive” tax bill this year as he has to exercise a large number of stock options coming due next year.

“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,” Musk said https://twitter.com/elonmusk/status/1457064697782489088 on Twitter on Saturday.

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” he said, referring to a “billionaires’ tax” proposed by Democrats.

Musk has criticized the proposal, which would affect 700 billionaires and impose taxes for long-term capital gains on tradable assets, whether or not they have been sold.

Musk said that he will abide by the results of the poll, whichever way it goes.

The poll received near 2 million responses in seven hours after he posted it, with 55% of respondents approving the proposal to sell the shares. The poll is scheduled to end around 3 p.m. ET (2000 GMT) on Sunday.

Musk’s shareholding in Tesla comes to about 170.5 million shares as of June 30 and selling 10% of his stock would amount close to $21 billion based on Friday’s closing, according to Reuters calculations.

‘STOCKS GO DOWN’

Musk has an option to buy 22.86 million shares at $6.24 each, which expires on Aug. 13 next year, according to a Tesla filing. Tesla’s closing price was $1,222.09 on Friday.

In September, Musk said he is likely to pay taxes of over half the gains he would make from exercising options. He also dismissed the possibility that he would take loans with his Tesla shares as collateral. “Stocks don’t always go up. They go down,” he said at the code conference.

Some Tesla board members, including his brother Kimbal Musk, offloaded large numbers of shares after Tesla stock hit a record high late October.

Musk recently said on Twitter he’d sell $6 billion in Tesla stock and donate it to the World Food Program (WFP), provided the organization disclosed more information about how it spent its money.

His tweet raised some eyebrows in the world of finance.

“We are witnessing the Twitter masses deciding the outcome of a $25B coin flip,” Venture investor Chamath Palihapitiya wrote on Twitter.

“Looking forward to the day when the richest person in the world paying some tax does not depend on a Twitter poll,” Berkeley economist Gabriel Zucman tweeted.

Musk got into trouble with a tweet about taking Tesla private in 2018.

(Reporting by Ann Maria Shibu in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Alistair Bell, David Gregorio and William Mallard)

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