Elon Musk's Twitter Poll Votes Yes to Tesla Stock Sale
Image Source: (Bloomberg)
November 7, 2021
On November 6th Elon Musk posed a question in the form of a poll to his 62 million followers, is read as follows:
The 10% Elon Musk is proposing to sell is valued at roughly $21 billion, with him pledging to do whatever the outcome yielded. As shown, "yes" won the poll carrying almost 58% of the 3.5 million votes cast.
Currently, Elon Musk has around 17% of Tesla, and his stake is valued at over $200 billion.
This Twitter poll came in response to the current discussion in America on how the wealthiest Americans should be taxed, Congress discussed taxing unrealized gains for these individuals but ultimately backed down due to strong opposition. With this sale, Elon Musk would pay taxes on gains. Due to his compensation structure at Tesla, he does not take a cash salary instead his compensation is in the form of stock options.
The current long-term capital gain tax is 23.8%, with Congress discussing the possibility of raising this number this could be a good time for him to sell and not take as much of a tax hit.
The potential of a large stock sale from Elon Musk has other Tesla investors discussing if this is a good or a bad thing. Some worry that a large sale of stock could mean a lack of faith in the company from Elon Musk. Others feel that the sale is the opposite and illustrates the confidence Elon Musk has in the company to rebound. Another concern surrounds the surplus of Tesla stock that would then be available and the possibility of share value plummeting.
Overall, posting a Twitter poll to make such a decision is certainly interesting but not unexpected from Elon Musk who has routinely used Twitter to voice his opinion. This situation will be interesting to follow from a tax perspective and to see how such a sale will ultimately impact Tesla's value.
Source: (The Wall Street Journal)