More than $30 billion was wiped off Tesla’s market value on Monday after millions of Elon Musk’s Twitter followers voted in favor of him selling 10% of his shares in the company.
Tesla shares fell by about 3% in morning trading in New York, recovering slightly from a premarket drop of 6%.
Elon Musk says he’ll let Twitter users decide if he should sell 10% of the 170.5 million shares he holds in Tesla (TSLA).
Musk, the company’s founder and CEO and posted a Twitter poll Saturday afternoon which said, “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?”
He added he will follow the poll’s result whichever way it goes. Three hours after the poll was being posted more than a million people had voted, with 54.1% voting yes and 45.9% voting no.
Musk has previously fallen foul of regulators for posting tweets that have moved Tesla’s stock price, without previously consulting the board or fully vetting the material information he was providing shareholders.
In 2018, the SEC charged him with fraud, after tweeting that he was considering taking Tesla private.
To settle the charges, Musk agreed to a court-approved deal that required that Tesla directors review any social media posts containing information “material” to shareholders.
Months later, after he was called out for defying the order, the settlement was amended to include a specific list of topics Musk needs permission to tweet about. The list includes tweets about the company’s financial condition, production numbers or new business lines.
Musk receives no salary from Tesla. His 170.5 million shares of Telsa were worth $208.3 billion as of the close of trading on Friday. At the price of $1,222.09 per share, 10 percent of them would be valued at $20.8 billion. With a long-term capital gains tax rate of 20% for someone in Musk’s income bracket, a tax bill from the sale would approach $4.2 billion.
He has owned 80% of those 170.5 million Tesla shares since the company’s initial public offering in 2010. In addition to the shares he owns currently, he has the option to buy another 73.5 million shares. It’s not clear if those shares would be counted in his holdings if the Twitterverse convinces him to sell 10% of his stake in the company.
As of Saturday, Musk is the richest man on earth with a total net worth of $338 billion, according to the Bloomberg Billionaires Index.
— Ramishah Maruf, Chris Isidore and Clare Duffy contributed to this story.