Elon Musk is currently the world’s richest person with a fortune estimated to be more than $280bn. Over the weekend, Musk asked his 62.7 million Twitter followers if he should sell 10% of his Tesla stock. With 3.5 million votes, the Twitter poll came out, with 57.9% of the voters agreeing to sell the stock. He tweeted, “I will abide by the results of this poll, whichever way it goes.”
The real reason Elon Musk sold his shares
Elon Musk faces a tax bill of more than $15 billion on stock options in the coming months. According to financial records released Wednesday evening, Tesla CEO Elon Musk sold roughly $5 billion in Tesla stock. The sale of about a fifth of the shares was part of a pre-arranged trading plan set up in September. Regardless of the outcome of the Twitter vote, the tax bill made the sale of Tesla stock this year inevitable.
This was long before he posted the poll on Twitter, so one has to wonder what would happen if it came down to a ‘No.’ Tesla shares fell by around 16% in the two days after the poll came out in favor of him selling shares. However, they regained some ground on Wednesday.
Part of this latest transaction saw him selling the stocks given to him by the company as his pay package. Elon Musk currently owns over 166 million shares in Tesla. As for his pay package, he is not paid in cash by Tesla. According to him, “I only have stock; thus, the only way to pay taxes personally is to sell stock.” Musk has also taken out several loans using his shares as collateral. He might also be looking to pay those loan obligations.
Musk was given stock options back in 2012 as part of a compensation plan. Since he doesn’t take salaries or bonuses, most of his wealth comes from stock awards and gains at Tesla’s share price. The 2012 award was for 22.8 million shares which were $6.24 per share. However, on Friday, Tesla shares closed at $1,222.09. Meaning Musk gains on the shares totals just under $28 billion.
Elon Musk sold 10% of his Tesla shares which were worth $5 billion. On Twitter, he asked his followers whether or not he should sell the shares.