Tesla Shares Fall After Twitter Users Vote for Elon Musk to Sell Stock


Tesla shares fell 7.5 percent in premarket trading on Monday, as investors prepared for a proposed sale of its chief, Elon Musk, to nearly a tenth of their stake in the electric-car maker following a Twitter poll.

musk, Tesla’s chief executive officer and richest man in the world, tweeted on Saturday that it would offload 10 percent of its stock if users of the social media network approved the proposal.

Shares of the electric-vehicle maker closed 6.2 percent lower at $1,146.43 (about Rs 84,900). Shares listed in Frankfurt closed at 989.10 euros (about Rs 84,700), down about 7 per cent.

Twitter poll asking musk Followers on whether to sell a stock received over 3.5 million votes, and 57.9 percent of people voted “yes”.

Musk previously said he would have to exercise a large number of stock options over the next three months, which would create a huge tax bill. Selling some of your stock can free up funds to pay taxes.

“I was ready to accept any outcome,” Musk said after the voting ended. Market participants expected speculators to try to push their sales.

According to Reuters calculations, as of June 30, Musk’s stake in Tesla stood at about 170.5 million shares and the sale of 10 percent would amount to close to $21 billion (about Rs 1,55,480 crore) at the end of Friday.

Including stock options, Musk owns a 23 percent stake in Tesla, the world’s most valuable car company.

According to Refinitiv Eikon data, in the three months to November 4, company insiders sold shares worth $259.62 million (about Rs 1,922 crore) in Tesla, excluding the settlement of indirectly held shares.

Musk’s straw poll follows a proposal by US Senate Democrats to tax billionaires’ shares and other tradable assets to help finance president Joe Biden’s Social spending agenda and to fill a loophole that has allowed them to defer capital gains taxes indefinitely.

“The last thing you do when unloading massive exposure is to show your hand,” said Chris Weston, head of research at broker Pepperstone in Melbourne.

“Buyers turn away when you have this kind of overhang, but that’s no ordinary story and Musk’s way of falling back on a proposal to tax the elite with gains on unrealized profits.”

Tesla breached a trillion dollars in market capitalization last month, becoming the fifth US company to join a club that includes Apple, Microsoft, heroine, And Alphabet.

“The dip is not going to last very long, as Tesla has such a phenomenal record of pulling back from such sell-offs,” said David Madden, market analyst at Equity Capital in London.

Investors will also be watching for any backlash from regulators on Musk’s Twitter poll. America Securities and Exchange Commission ordered Tesla to investigate any material public communications made in relation to the EV maker, following its 2018 tweet that it had a $72 billion (about Rs 5,33,145 crore) transaction to take Tesla private. “Funding secured”.

© Thomson Reuters 2021

.