Tesla shares fell up 5 per cent as the market opened in the US after social media users directed CEO Elon Must to sell stock.
On Saturday US time, the founder ran a poll on Twitter asking if he should sell 10 per cent of his Tesla stock - a
Tesla shares slide after Elon Musk runs Twitter poll on selling stock - and his followers vote 'yes'
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Musk might have been planning to sell a substantial chunk of stock regardless.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
— Elon Musk (@elonmusk) November 6, 2021
Do you support this?
He tweeted that he would abide by the result of the poll.
"I was prepared to accept either outcome," Musk said, after the voting ended. Market participants expected speculators would try to front-run his selling.
Tesla's shares have fallen more than 5 per cent nine times this year. Their volatility has been fuelled by Musk's social media posts on topics such as the environment and cryptocurrency - with the effect of his tweets compounded by the company's relatively small free float (the amount of shares traded not held by insiders).
Musk's tweet came amid pressure in Washington to increase taxes on billionaires like him.
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Some Democrats have been pushing for billionaires to pay taxes when the price of the stocks they hold goes up, even if they don't sell any shares. It's a concept called "unrealised gains," and Musk is sitting on a lot of them with a net worth of roughly $421 billion.
"Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10 per cent of my Tesla stock," he tweeted today. "Do you support this?"
Much of Musk's wealth is held in shares of Tesla, which does not pay him a cash salary. "I only have stock, thus the only way for me to pay taxes personally is to sell stock," he tweeted.
Some Democrats have been pushing for billionaires to pay taxes when the price of the stocks they hold goes up, even if they don't sell any shares. It's a concept called "unrealised gains," and Musk is sitting on a lot of them with a net worth of roughly $421 billion.
Oregon Senator Ron Wyden has proposed a new tax on unrealised gains on publicly traded assets for some of the wealthiest Americans.
Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the Billionaires Income Tax. https://t.co/KFHw3VZ45H
— Ron Wyden (@RonWyden) November 6, 2021
He responded to Musk's poll by writing, "Whether or not the world's wealthiest man pays any taxes at all shouldn't depend on the results of a Twitter poll. It's time for the Billionaires Income Tax."
In October, when releasing details of the proposal, Wyden said, "There are two tax codes in America. The first is mandatory for workers who pay taxes out of every paycheck. The second is voluntary for billionaires who defer paying taxes for years, if not indefinitely.
"The billionaires income tax would ensure billionaires pay tax every year, just like working Americans. No working person in America thinks it's right that they pay their taxes and billionaires don't."
At the time, Musk responded by writing, "Eventually, they run out of other people's money and then they come for you."
Musk also reportedly proposed selling off some Tesla stock during the Code Conference in September.
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"I have a bunch of [stock] options that are expiring early next year, so that's a huge block of options we'll sell in Q4," he told journalist Kara Swisher.
She had asked Musk if he was surprised at the Tesla stock's meteoric price rise. This morning it was selling for US$1,222.09.
Musk responded, "I have gone on record and said I think [Tesla's] stock price is too high, in my opinion."
He later said, "What am I supposed to do? I'm not the one making it go up."
Musk's poll was likened to a "coin flip" by Social Capital CEO Chamath Palihapitiya.
"We are witnessing the Twitter masses deciding the outcome of a $25 billion coin flip," he wrote on Twitter.
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Musk's net worth is estimated to be US$338 billion, according to Bloomberg.
