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Elon Musk abides by Twitter poll results, will sell 10% of his Tesla (TSLA) shares

Hey kiddies, it's time for another news story based on a tweet from Elon Musk. Tesla shareholders need to buckle up because the CEO is dumping 10% of his stake.
Captain Business
Captain Business
3

It's become increasingly apparent over the years that Elon Musk uses Twitter too much. The CEO of Tesla took to the social media platform yesterday with a poll asking people if he should sell 10% of his stake in the electric vehicle company. This nearly $20 billion financial decision now rests in the hands of Twitter, because we are truly living in the dumbest timeline possible. With over 3.5 million votes cast, 58% Twitter users voted in favor of Musk liquidating 10% of his TSLA shares.

Here's a transcript of the entire tweet thread posted yesterday (in case Musk deletes it):

  • 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?
      • Yes
      • No
  • I will abide by the results of this poll, whichever way it goes
    • *abide(n)
  • Note, I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.

Musk's reference to a rumor out of Congress that taxation on unrealized capital gains may be implemented in the future, but as of right now there is so such regulation or law. The Tesla CEO has previously mentioned that at the Code Conference in September 2021 that he had a large block of options set to exercise in the fourth quarter of the year and that he would have to liquidate those shares to pay taxes. "I have a bunch of options that are expiring early next year, so ... a huge block of options will sell in Q4 — because I have to or they’ll expire,” said Musk during the Kara Swisher interview.

It's one thing to have to sell shares to pay taxes on exercised stock options compensation, but yesterday's poll goes against Musk's own words to shareholders in 2013. Musk tweeted out that, "just as my money was first in, it will be the last out." Based on the results of today's Twitter poll, it is fair to say that this was yet another moment where the world's richest man lied to his followers and shareholders. 

Musk has gotten into trouble with the SEC in the past for tweeting about Tesla (TSLA) information. In 2018, a tweet about securing funding to go private at a pre-split price of $420/share ended with Elon Musk being forced out of his Chairman of the Board role at the company. At that time, he purportedly agreed to have someone oversee any tweets he would send about the company going forward. 

Even last year, Musk tweeted out that he believed Tesla stock price is too high, and shares have risen another 700% since that tweet. The company is now valued at a market capitalization above $1 trillion, which may have some investors wondering just how much good news is priced into the shares. Musk even tried to throw cold water on the Hertz news that triggered this recent bull run to all-time highs for the stock, but the Tesla train just kept chugging along last week. 

This Daily Chart of Tesla (TSLA) over the last year and a half showcases the massive 700% run in the stock since Musk tweeted out that the share price was too high.
This Daily Chart of Tesla (TSLA) over the last year and a half showcases the massive 700% run in the stock since Musk tweeted out that the share price was too high.

It's important to note that Musk seems to be taking shots at the Biden administration with this poll. Between the potential tax on unrealized capital gains and not being invited to an electric vehicle summit at the White House, it seems like the richest person on Earth is preparing for something. Just yesterday, Warren Buffet's Berkshire Hathaway reported over $149 billion of cash on their balance sheet, so perhaps Musk is also seeing the need for liquidity in the form of cash.

Musk owns somewhere in the vicinity of 20% of TSLA shares which has his net worth rapidly approaching $300 billion. It is hard to blame the guy for wanting to diversify, but the motivation for this Twitter poll is pretty suspect. Between moving Tesla from California to Texas, and a series of tiny jabs at the Biden administration, it seems as if Elon Musk is readying himself for something with this sale of shares. With $20 billion in cash before paying his taxes, it will be interesting to see what exactly Musk does with the money. 

Not all of Elon's tweets are dank memes, and while some can hurt the financial health of individual shareholders, some are just tone deaf and cringy. Some CEOs completely stay off of Twitter, while others post every little thing that comes into their mind while they are on the can. That's the price of free speech in the 21st century, but only time will tell if Tesla shareholders will be paying the price for the results of this Twitter poll. Monday will be an interesting day for TSLA shares, so be sure to keep it locked onto Shacknews for all the latest news and stock-moving tweets as they break.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

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