Tesla drops 7% after Elon Musk asks Twitter whether he should sell $21 billion of stock as he stares down a big tax bill
Tesla stockdropped as much as 7% on Monday as Elon Muskmulled a $21 billion share sale.
- The Tesla CEO asked his Twitter followers on Saturday if he should sell 10% of his stake - and they said yes.
Tesla fell as much as 7% on Monday after CEO Elon Musk proposed a sale of about one-tenth of his gigantic holding of the electric-car maker's shares.
Musk on Saturday asked his 63 million Twitter followers whether he should sell 10% of his Tesla stock, saying, "I will abide by the results of this poll, whichever way it goes."
After 24 hours, 3.5 million people had voted in the poll. Around 57.9% were in favor of him selling the shares while 42.1% voted no.
Musk, who has been Tesla CEO since 2008, owns 170.5 million shares in the electric-car company, and a 10% stake would be worth around $21 billion.
The entrepreneur has previously said that he plans to sell stock before the end of the year. He told the Code conference in September: "A huge block of options will sell in Q4 - because I have to, or they'll expire."
Musk likely faces a large tax bill north of $10 billion from stock options he was awarded in 2012 which have since soared in price. He has also taken out personal loans using his shares as collateral.
The Tesla boss tweeted on Saturday: "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."
Wedbush analyst Dan Ives said: "With a tax bill that we calculate at north of $10 billion, selling stock over the coming months is not a surprise, although holding a Twitter poll to sell 10% of his stock is another bizarre soap opera that can only happen to one company and one CEO in the world, Musk."
"Today Musk owns roughly 23% of Tesla, and it was viewed by many on the Street that he would sell up to ~5%/6% of his ownership stake, with 10% being a higher amount that could surprise some investors but ultimately it's a digestible number we are not overly concerned about," Ives wrote in a note Monday.
Shares in Tesla have soared in 2020 and 2021 as investors flush with cash due to government and central bank stimulus have bet that the company will lead the green revolution in transport. Tesla stock started 2020 at around $95 but closed at $1,222.09 on Friday.
Strong third-quarter earnings and rental car company Hertz's announcement that it would buy 100,000 Teslas have helped push the stock up more than 50% over the last month.
The dramatic rise in Tesla's stock price has sent Musk to the top of the global rich list. He's now worth $338 billion, according to the Bloomberg Billionaires Index, and has seen his wealth rise by $169 billion over the last year. Amazon founder Jeff Bezos is second, with $202 billion of wealth.
- RBI extends deadline to exchange, deposit Rs 2,000 notes till Oct 7
- Explained: TCS on your child's overseas education and mitigating strategies
- From Pixel 8 to Galaxy S23 FE – smartphones launching in October 2023
- World Cup 2023 final squads – Ind, Aus, Eng and all the other teams
- Eating your way to clear vision: 10 foods for healthy eyes