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Monday, January 30, 2023

Tesla Share Price Falls after Elon Musk Tweets a Poll

Tesla stock has dropped 4.9 percent after Twitter users voted in favor of Tesla CEO Elon Musk surrendering 10% of his ownership in the company to pay taxes.

Mr Musk asked his Twitter followers if they thought he should sell the stock, and 58 percent of the 3.5 million accounts who voted replied yes.

It might result in his selling over $21 billion (£16 billion) in stock.

Mr Musk conducted the poll over the weekend in reaction to US Democrats’ proposal for a “billionaires tax.”

Mr Musk, who is one of the world’s wealthiest individuals, promised to follow the poll’s findings “either way it goes.”

The Democrats advocated taxing billionaires’ assets, such as stocks, in order to target them.

Billionaires are frequently rewarded in stock, which implies their wealth fluctuates with the stock market. However, they only pay tax on the gains when the stock is sold.

Mr Musk’s stock options are set to expire next year, and he has a huge amount of them. Mr Musk would have to pay a hefty tax fee in order to use them.

Mr Musk’s stake in Tesla was at 170.5 million shares as of June 30, and selling 10% of that would net him close to $21 billion based on Friday’s closing prices.

Tesla’s CEO, who has a 23 percent interest in the company, has yet to comment officially on the results of the Twitter poll.

Mr Musk stated on Twitter that he receives no salary or incentives from any of his businesses, implying that he has no taxable income.

“Elon Musk doesn’t like to do things the traditional way, so conducting a Twitter vote over whether he should sell 10% of his Tesla share would sound odd, but it’s standard behavior for him,” said Russ Mould, director at AJ Bell Investment.

Mr Mould said the scenario was a “open invitation” for sellers to “make a wager that the shares will fall,” resulting in a profit if the company fell in price.

The US regulator, the Securities and Exchange Commission, has declined to comment.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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