Electric car maker Tesla Inc’s Frankfurt-listed shares fell about 9% on Monday as investors prepared for Chief Executive Elon Musk’s proposed sale of about 10% of his holdings in the company following his Twitter poll. The 50-year-old billionaire on Saturday tweeted that he would offload 10% of his stock if users of the social media network approved the proposal.
The world’s richest man with a net worth of $338 billion, polled his more than 62 million Twitter followers on Saturday about whether he should sell 10 per cent of his Tesla shares, insisting he would do as voters say. Musk’s query follows a proposal by Congressional Democrats to tax the super-wealthy more heavily by targeting stocks, which are usually only taxed when sold.
“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Musk wrote, asking followers whether they agree “yes” or “no.” He further tweeted, “I will abide by the results of this poll, whichever way it goes”. Till now, nearly 58 per cent have voted in favor of selling.
Tesla’s shares listed in Frankfurt were down 7% at 986 euros at 0827 GMT. With Tesla shares dropping, Musk’s net worth also went down by $2 billion. Elon Musk’s net worth as on Monday is $338 billion. Despite a $2 billion dip in net worth, Musk is way ahead of second richest person Jeff Bezos. As per the Bloomberg billionaires Index, Jeff Bezos’ net worth is $202 billion, around $136 billion less than Musk’s net worth.
Musk had previously said he would have to exercise a large number of stock options in the next three months, which would create a big tax bill. Selling some of his stock could free up funds to pay the taxes. “I was prepared to accept either outcome,” Musk said after the voting ended. The multi-billionaire also clarified in another tweet that he does not take a cash salary or bonus from anywhere and that he only has stock, thus the only way for him to pay taxes personally is to sell stock.
Note that the electric car maker’s U.S.-listed shares are up 73.2% so far this year, compared with a 23.9% increase in the Nasdaq Composite index. As of June 30, Elon Musk’s shareholding in Tesla is about 170.5 million shares and selling 10% would amount to close to $21 billion based on Friday’s close.
As per Bloomberg, Musk owned about 17 percent of Tesla’s outstanding shares as of June 30, currently worth $208.37 billion. He was also awarded a large package of stock options and convertible shares as compensation. The entrepreneur owns a 23% stake in Tesla including stock options.
