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

08 November 2021 - 06:38 By Reuters
SpaceX owner and Tesla CEO Elon Musk.
SpaceX owner and Tesla CEO Elon Musk.
Image: Hannibal Hanschke-Pool/Getty Images

Tesla Inc CEO Elon Musk on Saturday asked his 62.5 million followers on Twitter in a poll if he should sell 10% of his Tesla stock.

"Much is made lately of unrealised gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock," Musk wrote in a tweet referring to a "billionaires' tax" proposed by Democrats in the US Senate.

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

The poll received more than a million responses in three hours since he posted it, with 54% of respondents approving the proposal to sell the shares. The poll was scheduled to end around 3pm 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 $21bn (roughly R315,422,310,000) based on Friday's closing, according to Reuters calculations.

Analysts said he may have to offload a significant number of shares to pay taxes since a large number of options will expire next year.

The comments from Musk come after the proposal in the US congress to tax billionaires' assets to help pay for President Joe Biden's social and climate-change agenda.

Musk is currently the world's richest person and owner of several futuristic companies, including SpaceX and Neuralink. He has previously turned to Twitter to criticise the billionaires' tax.

His tweet raised some eyebrows in the world of finance.

"We are witnessing the Twitter masses deciding the outcome of a $25bn coin flip," Venture investor Chamath Palihapitiya wrote on Twitter in response to Musk's tweet.

"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 Tesla in 2018.

The US Securities and Exchange Commission sued him after he tweeted he had “funding secured” to take Tesla private at $420 per share. The agency said the tweet, which sent Tesla’s share price up as much as 13.3%, violated securities laws. Musk later reached a deal with the SEC to end the dispute.

"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 on Twitter.

Tesla shares recently hit a record high after it received its biggest-ever order of 100,000 electric rental cars from Hertz.

Tesla board members, including Elon Musk's brother Kimbal, have recently sold shares of the electric carmaker. Kimbal sold 88,500 Tesla shares while fellow board member Ira Ehrenpreis sold shares worth more than $200m (roughly R3,004,062,000).

Musk recently said on Twitter he'd sell $6bn (roughly R90,121,860,000) in Tesla stock and donate it to the World Food Program (WFP), provided the organisation disclosed more information about how it spent its money. Musk and WFP head David Beasley have been engaging in a heated debate since Beasley last week challenged billionaires to give more of their wealth to end hunger.