Tesla declined after Elon Musk’s Twitter followers voted in favour of selling 10 per cent of his stake in a <a href="https://www.thenationalnews.com/business/technology/2021/11/07/elon-musk-will-sell-10-of-tesla-shares-if-twitter-poll-agrees/" target="_blank">poll</a> set up by the electric car chief. A majority of 3.5 million Twitter users – 58 per cent – said they’d support such a sale in a Twitter poll that Mr Musk ran during the weekend. The stake would be valued at about <a href="https://www.thenationalnews.com/business/technology/2021/11/07/elon-musk-will-sell-10-of-tesla-shares-if-twitter-poll-agrees/" target="_blank">$21 billion </a>based on 170.5 million Tesla shares he holds. “I was prepared to accept either outcome,” Mr Musk said in a tweet after the poll closed. Tesla fell as much as 7.2 per cent in pre-market trading compared with Friday’s close of $1,222 in New York, tracking an earlier indication from Germany’s Tradegate. The crowdsourcing exercise is the latest example of Mr Musk’s long history of using Twitter and his legions of fans on the platform to stoke interest in his company, sometimes pushing the envelope with tongue-in-cheek tweets. The world’s richest person proposed the move in a tweet citing recent discussions about the ultra-wealthy hoarding unrealised gains to avoid paying taxes. Mr Musk doesn’t take a salary, but has to pay taxes on any stock options that he exercises. Mr Musk’s tweets have moved Tesla shares in the past, sometimes drawing the ire of authorities. In 2018, Mr Musk agreed to get approval from a Tesla lawyer before communicating material information to investors as part of a settlement with US securities regulators. It wasn’t clear whether that official previewed Mr Musk’s Twitter poll. While large sales by insiders are often seen as a negative signal, a sale of this size won’t alter Tesla’s story in a meaningful way, said Dan Ives, an analyst at Wedbush Securities. Demand remains high for Tesla shares among both institutional and retail investors, he said. The unorthodox step of getting buy-in from fans and investors via a poll may also ease any concerns. “Selling 10 per cent is probably going to add 1.5 per cent to 2 per cent to the float, so it doesn’t really significantly move the needle,” Mr Ives said. “I do believe that him doing it in this way definitely would soften the blow and would help the perception as well.” The car maker’s stock has soared 73 per cent this year to $1,222.09 as of November 5, giving it a valuation of $1.2 trillion. The number of shares that Mr Musk – its chief executive and largest shareholder – could be set to offload is equivalent to 80 per cent of Tesla’s average daily trading volume in the past three months. The amount of stock he may potentially sell would be even greater if his options are included. Tesla’s stock won’t officially begin trading again until the early morning hours of Monday in the US. Mr Musk’s fortune stands at $338bn, according to the Bloomberg Billionaires Index. About one-quarter of that consists of Tesla stock options that he’s free to exercise at any time. The securities come from two big awards he received in 2012 and 2018. The older contracts expire in August next year. If he exercised all of the options now and immediately sold the shares, they would net him $95.9bn before taxes. Mr Musk may be signalling that he wants liquidity beyond the cash he’s secured by borrowing against his holdings in the EV maker. Last week he suggested he’d sell some stock if the UN could prove $6bn could help alleviate world hunger. For years, Mr Musk has said he would be the last to ever sell stock, and has often added to his position when Tesla has raised money from Wall Street so that his stake is not diluted. In late 2020, Mr Musk moved to Texas, which has no state personal income tax. But as Tesla’s market value has skyrocketed and his personal wealth has ballooned, Mr Musk has become a symbol of rising inequality – something he appears to be sensitive to. He was among the billionaires mentioned in a Pro Publica investigation of how the ultra-rich avoid paying taxes, and has become a target of members of Congress who are pushing a billionaires tax. “Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll,” US Senator Ron Wyden, an Oregon Democrat, wrote in a tweet on Saturday. “It’s time for the Billionaires Income Tax.” On his way to becoming the world’s richest person, Mr Musk has made millionaires – and even at least one billionaire – among some of his fans, employees and other investors. Among them is Leo KoGuan, a Singapore-based retail investor and business owner who used his already considerable wealth to amass more than $7bn in Tesla shares.
