Elon Musk tweeted on Saturday that if Twitter users approved the proposal, he would sell 10% of his stock.
On Saturday, the world’s wealthiest person tweeted that he would sell 10% of his stock if users approved the proposal. Approx 3.5 million people voted in the poll. Musk previously stated that he would have to exercise any stock options in the next three months, resulting in a large tax bill.
Selling some of his stock may allow him to pay his taxes. More info According to Reuters calculations, Musk’s shareholding in Tesla was approximately 170.5 million shares as of June 30, and selling 10% would amount to close to $21 billion based on Friday’s closing price.
“Unrealized gains have recently received a lot of attention as a way to avoid paying taxes”. So I suggest selling 10% of my Tesla shares,” Musk stated on Saturday, adding that he does not receive any cash compensation or bonus “from any place” and just owns Tesla stock.
US Senate Democrats have introduced legislation to tax billionaires’ stocks and other tradable assets to fund President Joe Biden’s social spending plan and close a loophole that has allowed them to defer capital gains taxes indefinitely. Musk slammed the proposal, saying, “Eventually, they run out of other people’s money, and then they come after you.”
On Saturday, Senate Finance Committee Chairman Ron Wyden remarked, “Whether or not the world’s wealthiest man pays any taxes at all should not depend on the results of a Twitter vote.” “It’s past time for a Billionaires Income Tax to be implemented.”
Musk owns a 23% interest in Tesla, the world’s most valuable car firm, with a more than $1 trillion market capitalization. He also holds many significant companies, including SpaceX. Elon Musk’s brother, Kimbal Musk, sold 88,500 Tesla shares on Friday, becoming the second board member to sell a substantial amount of Tesla shares as the price hit new highs.
Musk owns a 23% interest in Tesla, the world’s most valuable car firm, with a more than $1 trillion market capitalization. He also holds several significant companies, including SpaceX. Elon Musk’s brother, Kimbal Musk, sold 88,500 Tesla shares on Friday. Musk announced on Twitter a week ago that he would sell $6 billion in Tesla stock and donate the proceeds to the United Nations World Food Program.
EXERCISE OF STOCK OPTIONS TAXES
Musk has stated that he does not want to borrow against the stock to pay taxes because the stock value may fall. According to a Tesla filing, he has the option to purchase 22.86 million shares at $6.24 per share which expires on August 13, next year. Based on Tesla’s Friday closing price of $1,222.09, the option exercise could result in a gain of approximately $28 billion.
Musk stated in September that he expects to pay taxes on more than half of the gains he would make from exercising options. Last year, he said that he was relocating from California to Texas, resulting in a lower total tax bill because Texas does not have an income tax, according to experts.
“(It) seems insane to borrow that much to pay taxes, so I have to assume he’d need to liquidate a significant amount of the shares purchased from the option exercise to pay taxes,” said Bryan Springmeyer, an attorney at San Francisco-based Springmeyer Law.
Musk and Tesla were each fined $20 million in 2018 for misleading investors by tweeting that he was considering taking the company private at $420 per share and had “funding secured.” The US Securities and Exchange Commission ruled that the tweet, which increased the share price by up to 13.3 percent, violated securities laws.
At best, Musk’s privatization plan was in its early stages, with no funding in place. He also promised to step down as chairman of Tesla and have all written communications, including tweets, pre-approved by the company’s lawyers.
