The Twitter poll asking Musk’s followers whether he should sell the stock received more than 3.5 million votes, and 57.9% of people voted “yes.”
Shares of Tesla Inc fell 7.5% in premarket trading on Monday, as investors prepared for a proposed sale of its chief, Elon Musk, to nearly a tenth of their stake in the electric-car maker following a Twitter poll.
Tesla’s chief executive officer and the world’s richest man, Musk, tweeted on Saturday that he would sell 10% of his stock if the social media network’s users approved the proposal.
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Shares of the electric-automaker were down 6.2% at $1,146.43. Shares listed in Frankfurt were down nearly 7% at 989.10 euros.
The Twitter poll asking Musk’s followers whether he should sell the stock received more than 3.5 million votes, and 57.9% of people voted “yes.”
Musk previously said he would have to exercise a large number of stock options over the next three months, which would create a huge tax bill. Selling some of your stock can free up funds to pay taxes.
“I was ready to accept any outcome,” Musk said after the voting ended. Market participants expected speculators to try to push their sales.
As of June 30, Musk’s stake in Tesla has come down to about 170.5 million shares and, according to Reuters calculations, a 10% sale would be closer to $21 billion as of Friday’s close.
Including stock options, Musk owns a 23% stake in Tesla, the world’s most valuable car company.
According to Refinitiv Eikon data, in the three months to November 4, company insiders sold $259.62 million worth of shares in Tesla, excluding the disposition of indirectly held shares.
Musk’s straw poll follows a proposal by US Senate Democrats to tax billionaires’ shares and other tradable assets to help finance President Joe Biden’s social spending agenda and fill a loophole that has cost him capital. Profit taxes have been allowed to be deferred indefinitely.
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“The last thing you do when unloading massive exposure is to show your hand,” said Chris Weston, head of research at broker Pepperstone in Melbourne.
“Buyers turn away when you have an overhang like this, but that’s no ordinary story and Musk’s way of falling back on his proposal to tax the elite with gains on unrealized profits. “
Tesla breached a trillion dollars in market capitalization last month, becoming the fifth US company to join a club that includes Apple, Microsoft, Amazon and Alphabet.
“The dip is not going to last very long, as Tesla has such a phenomenal record of pulling back from such sell-offs,” said David Madden, market analyst at Equity Capital in London.
Investors will also be watching for any backlash from regulators on Musk’s Twitter poll. The US Securities and Exchange Commission ordered Tesla to vet any material public communications Musk made regarding the EV maker, following his 2018 tweet that he had a $72 billion transaction to take Tesla private. “Funding Secure”.
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