Elon Musk sold around 900,000 shares after asking his Twitter followers if he should sell 10% of his Tesla stock, or not. However, the documentation suggests that the deal had started way before the poll. As per the recently released financial documents, Elon Musk sold roughly $5 billion of his Tesla stocks. He still owns over 166 million shares of the company.
Musk Sells Tesla Shares Through Twitter Poll
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?
— Elon Musk (@elonmusk) November 6, 2021
On Saturday evening, Elon Musk ran a Twitter poll, asking users if he should sell 10% of his shares, and stated that he would follow the findings. Unfortunately, Tesla’s stock price plummeted after the poll, implying that the 50-year-old Musk sold his shares at a lower price than if he had sold it before his tweet, resulting in a loss of tens of millions of dollars in unrecognized profit.
Musk invited his 62.5 million Twitter followers to vote in an unofficial poll even before the sale proposal was even made public. He assured his followers too that their decision would determine the fate of his Tesla assets.
According to the documents, he knew that some of his shares were up for sale this week. Tesla’s stock dropped more than 15% on Tuesday after the Twitter poll, before regaining more than 4% on Wednesday. On Thursday, the stock was up again due to the after-hours trading.
Why Did He Do It?
According to two financial disclosures, selling Tesla shares will settle Musk’s tax liabilities for stock options given to him in September. The Forbes magazine declared, musk to be one of the richest men in the world, with a net worth of $282 billion. However, the majority of his earnings come from Tesla shares only. Since Tesla does not provide him any stipend in cash, so selling the stocks was the best option for him to settle the tax debts.
He bought a little over 2.1 million shares for $6.24 apiece by exercising options. The company’s shares finished at $1,067.95 per share on Wednesday. More than 20 million new share options are set to expire in August, according to Musk. So, he decided to pay his tax obligations, which was the only possible thing for him to do.
What We Think
Since the public disclosures suggest that Musk had to pay his taxes, and selling his Tesla stocks was the best option, it looks like his decision was not solely dependent on the Twitter poll. But, more than 57% of followers voted in favor of selling the shares, boosting Musk’s confidence in his decision. So, the decision has saved the billionaire entrepreneur this time, and we hope he will have some counter-financial strategy for the future.