Tesla shares dipped by 4.5% on Monday morning after CEO Elon Musk asked his 62.8 million social media followers whether they supported him selling 10% of his company stock — despite the fact that he was likely going to sell a block of his shares anyway.
Around 58% of respondents voted in favor of the proposal, which received around 3.5 million votes. He said in a follow-up tweet that he would “abide by the results of this poll, whichever way it goes”; if we take him at his word, that means a large sale of shares is coming in the future.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
— Lorde Edge (@elonmusk) November 6, 2021
It’s hard to see the tweet as anything other than a piece of theater, as Musk had already signaled he would likely sell a large block of Tesla shares in other public statements. In a September conversation with tech journalist Kara Swisher, Musk acknowledged that a large portion of his Tesla stock options would expire in August of next year. “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 said.
There’s also the forthcoming tax bill on stock options that he was awarded in 2012 as part of an executive compensation plan. (Musk has frequently shared said that he does not take a paycheck from Tesla.) He faces income tax on the stock gains, which were awarded in 2012 at $6.24 per share — while Tesla stock is now trading for north of $1,200. Should he exercise those options, he faces a tax bill of more than $15 billion.
While it’s unclear if his tweet poll will do more than briefly push down the share price, Musk’s social media shenanigans have landed him in hot water with shareholders before. Musk faced a lawsuit earlier this year from a Tesla investor who said his “erratic tweets” violated a settlement with the U.S. Securities and Exchange Commission requiring oversight of his social media activities.
Among the tweets cited in the suit was a gem from May, when Musk tweeted, “Tesla stock price is too high imo.”