Tesla stock dropped 4.84 per cent on Monday after founder Elon Musk lobbed a 26-word tweet into the financial sphere.
In the Twitter poll shared by the US$318.4 billion ($429.3 billion) man on Saturday, Musk asked his followers if he should sell 10 per cent of his shares.
“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?” Musk asked his then-62.8 million followers, promising he would abide by the results of the poll.
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?
— Elon Musk (@elonmusk) November 6, 2021
It followed another Tweet in which Musk noted he didn't take a cash salary or bonus, and was only paid in stock.
“Thus, the only way for me to pay taxes personally is to sell stock.”
More than 3.5 million people have since voted in the poll, with 57.9 per cent saying ‘yes’ and 42.1 per cent voting ‘no’.
Tesla’s market capitalisation is currently around US$1.22 trillion, with Musk’s personal stake worth around US$250 billion.
That means that if Musk offloads 10 per cent of his 193.3 million shares, it will be a US$25 billion move.
By the end of trade on Monday, shares in Tesla had fallen 4.84 per cent, wiping around US$60 billion ($80.8 billion) from the company within hours of trade opening.
What’s behind the Tweet?
The tweet comes amid discussion in the US about whether the country needs to instate a billionaires income tax.
US Democratic politicians have proposed a tax on America’s billionaires targeting “unrealised gains” - or money made when stock prices go up - even if the billionaire in question doesn’t sell their shares.
Even without the proposed tax, Musk faces a US$15 billion tax bill in 2022.
The billionaire was awarded 22.8 million Tesla options in 2012, as part of his remuneration package, with a price of US$6.24 each.
Today, those shares are worth US$1,162 or, all up, about US$26.5 billion.
Musk’s options expire in April 2022, but to exercise them, the Tesla founder will need to pay tax on the gain. The bill could be as high as US$15 billion.