Wed, July 24, 2024

Musk uses Twitter polls to define the future of Tesla shares

Tesla company logo.

On Saturday, Elon Musk decided to ask his 62.6 million followers on Twitter to determine the fate of a 10% share of Tesla holdings.

Twitter polls are not considered formal, but Musk said he planned to rely on the results and sell a large block of his claims in the fourth quarter.

In September, at the Code Conference, Musk said that his marginal tax rate would be more than 50% once his stock options expire at Tesla. Besides, he said that he was already planning to sell soon.

At the conference, he said he has many options that are expiring at the beginning of the following year. Therefore he intends to sell a huge block of options in Q4. He added that he needs to do that; otherwise, they expire. Other former and current Tesla board members have also sold hundreds of millions of dollars worth of their Tesla shares after the end of October, as the company’s stock surged. These members include Antonio Gracias, Robyn Denholm, Ira Ehrenpreis, and Kimbal Musk.

Overview

Tesla shares rose after the third quarter when Hertz, a car rental company, announced that it was buying 100,000 Tesla vehicles for its line. A week later, after the announcement of Hertz, Musk commented to clarify that the rental car company had not signed a contract with Tesla yet. After the Hertz announcement, Tesla shares started to rise by around 35%, including Elon Musk’s net worth.

According to Ben Silverman, InsiderScore Director of Research, Musk would possibly continue exercising the options because they are due to expiration. He added that he is selling shares of the company because of the liquidity of Tesla shares and the massive tax bill.

On Saturday, Musk asked users on Twitter to decide whether or not he should keep or sell 10% of his shares.

He was also responding to criticism as if he avoided paying his fair share of taxes instead of managing his options holdings. He said that

people perceived unrealized gains as a method of tax avoidance. That was the reason why he decided to propose selling 10% of his Tesla shares. In the end, he asked a question if people supported this idea. He added a poll function so that users on Twitter could vote. He added that he would wait for the results of this poll.

 

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