The poll received more than 3.5 million votes; the sale price would be close to $21 billion US dollars based on Friday’s closing price.
Elon Musk, CEO of Tesla, Inc., should sell around 10% of his business stock, according to 57.9% of respondents who participated in a Twitter poll asking whether he should sell the stake.
“I was prepared to accept any outcome,” Musk remarked following the vote’s conclusion.
On Saturday, the world’s wealthiest person tweeted that he would sell 10% of his stock if users supported the idea. Musk previously stated that he would be required to exercise a large number of stock options during the next three months, resulting in a substantial tax payment. Selling some of his shares could provide him with the income necessary to pay his taxes.
Musk’s stake in Tesla was approximately 170.5 million shares as of June 30, and selling 10% would equal close to $21 billion US based on Friday’s closing price, according to Reuters calculations.
Over 3.5 million people voted in the poll.
“Given the recent emphasis on unrealized gains as a tool of tax avoidance, I recommend selling 10% of my Tesla stock,” Musk said on Saturday, adding that he does not receive any cash compensation or bonuses “from anyplace.”
Senate Democrats in the United States have introduced a proposal to tax billionaires’ stocks and other tradable assets in order to help pay President Joe Biden’s social spending agenda and close a loophole that has allowed them to defer capital gains taxes indefinitely.
Musk has slammed the concept, stating that “they will eventually run out of other people’s money and will then come after you.”
Tesla is now worth more than $1 trillion. US Senator Ron Wyden, who chairs the Senate finance committee and introduced the tax idea, said on Saturday: “Whether or not the world’s wealthiest man pays any taxes at all should not be determined by the results of a Twitter vote.”
“It is past time for the Billionaires Income Tax,” he continued.
Musk owns a 23% interest in Tesla, the world’s most valuable automaker, whose market value recently surpassed $1 trillion US. He also owns a number of other significant businesses, including SpaceX.
Kimbal Musk, Elon Musk’s brother, sold 88,500 Tesla shares on Friday, becoming the latest board member to liquidate a big portion of the company’s stock, which has reached record highs.
Musk announced on Twitter a week ago that he would sell $6 billion worth of Tesla stock and donate it to the United Nations World Food Programme in exchange for the organization disclosing more information about how it spends its money.
Gary Black, a portfolio manager at The Future Fund who is optimistic on Tesla, tweeted that Musk’s prospective stock sale would result in “1-2 days of minor selling pressure,” but that institutional demand would be strong to snap up the shares at a discount.
Musk previously stated that he did not want to borrow against his stock to pay taxes due to the risk that the stock’s value may decline.
According to a Tesla filing, he has an option to purchase 22.86 million shares at a price of $6.24 a share that expires on Aug. 13, 2022. The exercise of the option may result in gains of approximately $28 billion US dollars, based on Tesla’s Friday closing price of $1,222.09 US dollars.
Musk stated in September that he is likely to pay taxes on more than half of the proceeds from exercising options. He stated last year that he migrated from California to Texas, which should result in a reduction in his total tax payment, experts say, as Texas does not have an income tax.
“It seems irrational to borrow that much money to pay taxes, so I’m assuming he’d have to liquidate a significant portion of the shares acquired through the option exercise to pay taxes,” said Bryan Springmeyer, a lawyer at the San Francisco law firm Springmeyer Law.