Elon Musk, CEO of Tesla Inc, should sell around 10% of his Tesla stock, according to 57.9% of those who voted in a Twitter poll asking if he should do so.
After the vote, Musk said, “I was prepared to accept either conclusion.”
On Saturday, the world’s richest man tweeted that if users supported the idea, he would sell 10% of his stock. Musk has already stated that he will have to execute a substantial amount of stock options within the next three months, resulting in a significant tax burden. Selling some of his shares may be able to help him pay his taxes.
According to Reuters calculations, Musk’s investment in Tesla was around 170.5 million shares as of June 30, and selling 10% would be worth close to $21 billion based on Friday’s closing price.
More than 3.5 million people voted in the survey.
“I suggest selling 10% of my Tesla shares because much has been said recently about unrealized gains being a form of tax avoidance,” Musk stated on Saturday, adding that he does not take a cash income or bonus “from anybody” and just owns stock.
Senate Democrats have proposed taxing billionaires’ stocks and other tradable assets to help finance President Joe Biden’s social spending plan and close a loophole that allows them to avoid paying capital gains taxes indefinitely.
“Eventually, they run out of other people’s money, and then they come for you,” Musk said of the concept.
“Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll,” Senate Finance Committee Chairman Ron Wyden, who launched the tax plan, said on Saturday.
“The Billionaires Income Tax is overdue.”
Musk owns a 23 percent ownership in Tesla, the world’s most valuable automotive firm, with a market value that recently surpassed $1 trillion, including stock options. He also owns other significant businesses, such as SpaceX.
Kimbal Musk, Elon Musk’s brother, sold 88,500 Tesla shares on Friday, becoming the latest board member to sell a big amount of Tesla shares at record highs.
Musk announced on Twitter a week ago that he would sell $6 billion in Tesla stock and donate the proceeds to the UN’s World Food Program (WFP) if the agency gave greater information about how it used its funds.
Bullish on Tesla Musk’s probable stock sale, according to Gary Black, portfolio manager of The Future Fund, would result in “1-2 days of minor selling pressure,” but there would be strong institutional demand to buy the shares at a discount.
EXERCISE OF STOCK OPTIONS TAXES
Musk has stated that he does not want to borrow against his stock in order to pay taxes because the stock value may fall.
According to a Tesla filing, he has an option to buy 22.86 million shares at $6.24 apiece that expires on Aug. 13 next year. Based on Tesla’s Friday closing price of $1,222.09, the option exercise may result in gains of almost $28 billion.
Musk stated in September that he expects to pay taxes on more than half of the earnings he would generate from exercising options. Last year, he said that he had been transferred from California to Texas, which should result in a reduction in his total tax burden because Texas has no income tax, according to experts.
