Is Tesla Share Twitter Poll by Elon Musk Is a Bluff? cover image

Is Tesla Share Twitter Poll by Elon Musk Is a Bluff?

Gurinder Singh • November 7, 2021


Elon Musk, the CEO of Tesla and world’s richest person, asked his Twitter followers whether he should sell 10% shares in the electric car company in order to pay tax. He tweeted that he would “abide by the results of this poll, whichever way it goes”

And guess what, 58% of these followers who responded said “yes”, he should sell the shares. He did this poll for some specific reasons.

Tesla and Space-X founder Elon Musk, who has a fortune of more than $338bn, proposed that he sell 10% of his shares in Tesla to pay his “billionaires tax”, he needs to generate enough money to pay this new tax.

As he did not "take a salary or bonus from anywhere," selling stock was the only way for him to pay taxes personally. But a bonus scheme that granted him share options based on Tesla’s share price performance, he has made billions with the scheme.

What is the billionaires tax?

Democrats have proposed fixing up the gap between the wealthiest Americans and everyone else by introducing “billionaires tax”. Billionaires would pay tax based on the increased value of their stocks and shares every year. At the moment, tax is only due when they sell the stock and book the profit.

Ron Wyden, the Democratic senator from Oregon, said the proposed tax, would “ensure billionaires pay tax every year, just like working Americans”.

Does Musk have to accept the verdict of vote, and sell the shares?

Musk claimed in his tweet, he would abide by the result and “prepared to accept either outcome”.

He owns about 17% of Tesla’s shares. If he sell a tenth of his shared in one go it could well depress the price. But It’s not as if he will now dump all of his shares on the open market. He could drip feed them into the market over time. They often use some kind of blind brokering where the shares are sold on the behalf of seller in small batches over a period of time. This way they can avoid claims they benefited from insider information.

Since Musk announced his intention to sell, he could be in trouble with regulators if he sells now.