A controversial Twitter Poll caused Tesla CEO Elon Musk to sell over $5 Billion worth of shares. The Twitter Poll was about Musk’s tax bill. The sale of the shares still leaves Elon as a critical shareholder because the 5 billion us dollars was only a 3% value of his total company shares.
Elon Musk Twitter Poll
Last weekend, he said he would sell 10 percent of his holdings in the company, worth more than $20 billion, based on a poll he conducted on Twitter. The sale tweets caused a panicked sell-off of Tesla stock earlier this week, but it recovered slightly yesterday, with shares up 2.6 percent to $1,096.
Following the tweet, Elon Musk confirmed last weekend that he would sell 10% of his shares if he lost the poll. Elon lost and filed paperwork with the SEC to ensure the selling of the stock.
Effects of Elon Musk Selling 10% of the $TESLA Stock
As a result, the Fear Index went up, and many $TESLA holders panicked and sold the shares. Even though the stock made slight recoveries by +26%, this sudden sell wiped off $300 billion worth of value from the company’s total value, which is usually $1 trillion.
$TESLA also filed a 2-4 form confirming that Elon had exercised the option on 2,154,572 shares at a value of $6.24 per share. Investors must sign the S-4 form within two days of any sale or transaction.
Many investors question whether Elon intended to sell from the very start without any regard for the shareholders. Many users speculate it had been a sale-off plan for September; But Elon Musk delayed and used the Twitter Poll as a loophole.
Elon has been influencing the crypto space lately by tweeting images about meme coins. The renewable energy king recently shared a Chinese poem before the sale.
Tax Reasons
Many concluded the sudden deal of unrealized gains is a means of tax avoidance, drawing from the poem’s meaning. Billionaires also use this as a strategy, especially with Biden’s increase in tax rates.
Musk further confirmed that he did not take any salary bonuses from the sale. Instead, he used the sold shares to pay off $1.1billion in taxes due within 12 months.
The final results from the poll show that the majority agree with the idea. Therefore, it was a wise step in handling the sudden tax rise that the US government has imposed on significant industries, such as $TESLA.
Wisdom Will ‘Kill’ Elon
According to Wedbush Securities stock analyst Dan Ives, TESLA expected a large tax bill from the 23 million stock options, which it was awarded in 2012 and set to expire in August 2022.
Many investors agree that it is wise for Elon to sell the stocks now rather than in the future when the bear market is in effect. It is much easier to make a financial recovery now than in the bear markets.