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Sunday, Nov 28, 2021

Elon Musk Sells $1.1Bln in Tesla Stock to Cover Tax Obligations

Elon Musk Sells $1.1Bln in Tesla Stock to Cover Tax Obligations

In late October, Musk slammed a proposal initiated by Democrats in the US Congress to tax the investment gains of billionaires, which envisages using the revenue to cover social and economic programs, like child care and environment initiatives.

Tesla CEO Elon Musk has sold $1.1 billion worth of shares to satisfy tax related obligations, following a Twitter poll on whether he should sell off 10 percent of his holdings to pay a proposed “billionaire's tax,” setting off worries that such a sale could hurt Tesla's share price.

According to a regulatory filing from the company late Wednesday, Musk made the sale as he exercised stock options the same day to acquire more than 2 million shares.

Those shares would have been valued at more than $2.3 billion at the market’s close on Wednesday.

Musk turned to Twitter Saturday, and phrased his poll as a tax question, telling followers that “much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.”


The poll collected more than 3.5 million votes, and 58 percent supported a sale, as Musk vowed to abide by the result.

Tesla recovered 4.3 percent to $1,067.95 in Wednesday’s trading session after shares dropped sharply over the Twitter poll.

“Following the bizarre Twitter poll Musk put out over the weekend on his 10 percent ownership stake to be sold, it appears Musk walked the walk and thus has started selling Tesla shares into year-end,” said Wedbush analyst Dan Ives in a research note obtained by DailyMail.com.


In light of the introduced billionaire tax, which would tax unrealized gains of a handful of the richest Americans, Musk said he does not take a cash salary or bonus, so “the only way for me to pay taxes personally is to sell stock.”

“The company itself is on fire, with strong results,' said Tim Ghriskey, a senior portfolio strategist at New York-based investment management firm Ingalls and Snyder. “That is not going to fade quickly.”

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