On Saturday, Tesla CEO Elon Musk decided to consider leaving the fate of a sizable amount of his Tesla shares based on the opinion of his Twitter followers. The extremely popular chief executive asked his 62.5 million followers to determine the future of these shares through an informal Twitter poll. Earlier, Musk had already indicated that he would probably sell “a huge block of his options” in the last quarter of the year.
In September, when he appeared at a Code Conference, Musk had said that his marginal tax rate would be over 50 percent when his stock options at Tesla would expire. He said that he had “a bunch of options” that would expire in 2022. So, he was planning to sell a huge block of options in the fourth quarter. He said that he had to sell them. Otherwise, they would expire.
He proposed selling 10 percent of his stocks. He asked users on his Twitter poll to vote Yes or No after adding a poll function to his tweet. He said that he would abide by the result of the poll, “whichever way it goes.” At about 5:40 p.m. ET, over two hours after his tweet, 876,189 votes were in and about 54 percent said “yes”, according to a report by abc News.
According to a CNBC News report, Ben Silverman, who is InsideScore’s director of research, said that Tesla had more than a billion shares outstanding, as of late October. InsideScore calculated that if the Tesla CEO decided to exercise his options today, the increase in the number of outstanding shares would be only two percent.
Silverman also remarked that the effect on shareholders would be minimum, one of the reasons being that the sales would be expected and wouldn’t come as a surprise. He said that Musk would speak of what he was doing which was selling stock because of the enormous tax bill and also because of the liquidity of shares of Tesla.
In summer, ProPublica, an investigative news site, had published a report which noted that several billionaires paid minimal or zero tax. Elon Musk was reported to have paid zero tax in 2018. On Saturday, Musk said that the number was so low because he never took a cash salary or bonus from anywhere and that he only owned stock. He added that the only way for him to pay taxes was to sell stock.