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Thursday, December 2, 2021

Musk urged the sale of 10% of Tesla after voting on Twitter

Elon Musk asked Twitter users over the weekend to decide whether he should sell Tesla stock worth more than $20 billion and pay taxes – and the online crowd Responded Accompanied by a resounding “yes”.

Musk is obviously willing to cash out one-tenth of his stock and pay more than $4 billion in tax bills according to Twittersphere’s wishes. This is after the United States proposed that billionaires should pay taxes on their unrealized capital gains.he warn Last month, any new tax will one day extend to the middle class. He wrote on Twitter: “In the end, they run out of other people’s money, and then they come to you,” he wrote on Twitter.

Let the public decide whether he should sell Tesla stock on a large scale for the first time. This gimmick delighted Musk’s fans and made him the most followed business leader on Twitter, with 62.7 million followers and many critics. .

“Whether the richest person in the world pays any taxes shouldn’t depend on the results of the Twitter polls,” said Ron Wyden, the Democratic chairman of the Senate Finance Committee, before the voting results were announced. Wyden proposed a new tax on the unrealized capital gains of billionaires, which would hit the 700 richest people in the United States.

Musk said that he did not receive salary or bonuses from any of his companies, so he has no income to pay income tax. However, he made billions of dollars through a controversial Tesla compensation package agreed three years ago, according to which the automaker reached certain performance goals and its stock price reached a predetermined level , He was able to exercise a large number of stock options.

The Tesla CEO said on Twitter on Saturday: “Recently a lot of unrealized gains are a means of tax avoidance, so I recommend selling 10% of Tesla’s stock.” He added that he will “comply with The results of this poll, no matter what the results are.”

The 24-hour poll ended with nearly 58% of 3.5 million responses asking him to sell. Musk did not immediately respond to the results.

If he continues, the vote will result in a large number of Tesla shares entering the market. According to Friday’s closing price, Musk’s 17% stake in Tesla is worth US$208 billion. He did not specify when or how he will dispose of these shares. Many CEOs use so-called “blind” sales plans when disposing of large holdings in order to spread sales over a longer period of time and avoid any claims that they use inside information to determine when to sell.

Musk’s promised sale will far exceed Tesla’s own $12.3 billion worth of stock sold in 2020, when it used soaring stock prices to enrich its balance sheet. The transaction was divided into three phases during the year, with the largest two phases reaching USD 5 billion.

The stock’s average daily trading volume has reached $25 billion, making it one of the most liquid stocks on Wall Street.

Long-term capital gains face a federal tax rate of up to 20%, although Musk may have saved himself billions of dollars in additional state taxes. Tesla was founded in California and spent most of its life in California, levying a tax of up to 12.3% on capital gains. Musk listed his three houses in California for sale last year. Last month he also stated that Tesla officially moved its headquarters to Texas, which does not impose any personal income tax or capital gains tax.

Publicly stating that he will sell such a large amount of stock and then failing to follow up may expose Musk to actions by regulators if this is seen as something that may affect Tesla’s stock price. Three years ago, after Musk erroneously tweeted that Tesla was about to be acquired, the US Securities and Exchange Commission asked the company to start checking any communications that might affect its stock price.

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