Twitter users say ‘yes’ to Musk’s proposal to sell 10% of his Tesla shares

Tesla Inc CEO Elon Musk walks next to a screen showing an image of the Tesla Model 3 car during an opening ceremony for the China-made Tesla Model Y program in Shanghai, China, Jan. 7 2020. REUTERS / Aly Song / File Photo

Nov. 7 (Reuters) – Tesla Inc (TSLA.O) CEO Elon Musk is expected to sell around 10% of his Tesla shares, according to 57.9% of people who voted on his Twitter poll asking network users to social media if he should unload the stake.

“I was prepared to accept either outcome,” Musk said at the end of the vote.

The richest person in the world tweeted on Saturday that he would offload 10% of his shares if users approved the proposal. Musk has previously said he would have to exercise a large number of stock options over the next three months, which would create a big tax bill. Selling part of its stock could free up funds to pay taxes. Read more

As of June 30, Musk’s stake in Tesla was around 170.5 million shares and the 10% sale would amount to nearly $ 21 billion based on Friday’s close, according to calculations. from Reuters.

The poll garnered over 3.5 million votes.

“There has been a lot of talk lately about unrealized gains being a means of tax evasion, so I am proposing to sell 10% of my Tesla shares,” Musk said on Saturday, adding that he was not taking a salary in cash or bonus “from anywhere”, and no Stock.

Democrats in the US Senate have unveiled a proposal to tax billionaires’ shares and other marketable assets to help fund President Joe Biden’s social spending program and fill a loophole that has allowed them to defer earnings tax indefinitely in capital.

Musk criticized the proposal, saying, “Finally they don’t have any more money for the others, then they come and get you.”

Senate Finance Committee Chairman Ron Wyden, who launched the tax proposal, said on Saturday: “Whether or not the richest man in the world pays taxes should not depend on the results of a Twitter poll. . “

“It’s time for the billionaire income tax.”

Including stock options, Musk owns a 23% stake in Tesla, the world’s most valuable automaker whose market value recently exceeded $ 1,000 billion. It also owns other valuable companies, including SpaceX.

His brother Kimbal Musk sold 88,500 Tesla shares on Friday, becoming the latest board member to dispose of a large number of record-breaking Tesla shares.

A week ago, Musk said on Twitter that he would sell $ 6 billion in Tesla stock and donate it to the United Nations World Food Program (WFP), provided the organization discloses more information about the way she spends her money.

Tesla bull Gary Black, portfolio manager at The Future Fund, said the potential sale of Musk shares would result in “one to two days of modest selling pressure,” but said there would be strong demand. institutional to buy the shares at a reduced price.

TAXES ON THE EXERCISE OF STOCK OPTIONS

Musk said he didn’t want to borrow stocks to pay taxes because the value of the stocks could go down.

He has an option to buy 22.86 million shares at $ 6.24 each, which expires on August 13 next year, according to a Tesla filing. Exercising the option could result in gains of around $ 28 billion based on Tesla’s Friday closing price of $ 1,222.09.

In September, Musk said he would likely pay taxes on more than half of any gains he made from exercising options. Last year, he said he was transferred from California to Texas, which should lead to a reduction in the total tax bill because Texas has no income tax, experts say.

“(It) seems crazy to borrow so much to pay taxes, so I have to assume he would need to liquidate a substantial amount of the shares purchased when exercising the option to pay taxes,” Bryan said. Springmeyer, lawyer in San Francisco. Springmeyer Law firm.

Reporting by Aishwarya Nair and Vishal Vivek in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Daniel Wallis and Chizu Nomiyama

Our standards: Thomson Reuters Trust Principles.


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