Elon Musk’s 10% Stock Sale: Twitter, Taxes and the Billionaire Blues
It turns out that the world’s richest person gets to answer questions on Twitter — and the questions come with a hefty stake.
Twitter’s Big Vote
- The poll went live when Musk posted a tweet on November 6 asking: “Should I sell 10% of my Tesla shares?”
- More than 3.5 million users got in on the action.
- About 58% of those folks suggested the sale, giving Musk a clear yes‑vote.
After the poll closed, Musk said, “I was ready for either outcome.” It seems he’s ready to move forward regardless.
How Big Is the Sale?
As of June 30, Musk owned roughly 170.5 million Tesla shares. Selling 10% would mean liquidating around 17 million shares — an amount close to $21 billion (≈ S$28.4 billion) based on the last closing price. That’s a chunk of change even for a billionaire.
Tax Man Calls
- Why sell? Musk has a huge bundle of stock options that he expects to exercise in the next three months, creating a rocket‑balloon tax bill.
- He wants to avoid borrowing against the stock (which could drop in value) to pay the taxes.
- He’s set to hand out $6 billion in Tesla shares to the United Nations’ World Food Programme if the organization can provide more clarity on how it spends its funds.
Musk also pointed out that he earns no cash salary or bonus — just the stock he holds.
Senate Storm
US Senate Democrats are proposing a tax that would hit billionaires’ stocks and other tradable assets, aiming to finance President Biden’s social agenda. The proposal also addresses the loophole that lets many defer capital‑gain taxes indefinitely.
On Twitter, Musk criticized the move, saying: “Eventually, they run out of other people’s money and then they come for you.” Senate FM Chairman Ron Wyden replied that taxes shouldn’t depend on a tweet poll. Wyden hammered for a “Billionaires Income Tax.”
Other Musk Family Moves
Even the Musk clan isn’t immune to stock sales: Musk’s brother Kimbal offloaded 88,500 shares, following the latest board member to trim holdings at record highs.
What the Market Thinks
Gary Black, a portfolio manager at The Future Fund, believes the sale would create a one‑two day window of mild selling pressure. But institutional buyers are expected to step in and snap up the discounted shares.
Some Numbers on the Options
- He could buy 22.86 million shares at $6.24 each, expiring on August 13 next year.
- At Thursday’s price of $1,222.09 per share, it’s a potential gain of roughly $28 billion.
- In September, Musk said he usually expects taxes of over 50% of the gains from exercising options.
Last year he moved from California to Texas to ride the lower tax band — thanks to Texas’s lack of state income tax, experts say that helps trim his bill.
Bottom line: Elon Musk’s big sale is driven by the need to pay taxes on all that sweet‑sweet Tesla goodwill. Meanwhile, he’s winking at the world that even a billionaire’s stocks can’t escape the rules of the land.
