Last week, Tesla CEO and one of the wealthiest men in the entire world, Elon Musk, posed a question to his Twitter followers. “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” he wrote. “Do you support this?”
The post included a poll for his followers, and when the poll closed, 57.9% of respondents were in favor, while 42.1% were opposed. So, in accordance with the wills of the people, Musk has done exactly what he proposed, selling off about 4.5 million of his personal shares of Tesla stock, a roughly $5 billion value. According to reports, these sales were at least partly made to satisfy tax obligations.
While the poll was running on Musk’s Twitter, the uncertainty impacted the value of Tesla stock. On Tuesday, the value fell by 15%, but then recovered by 4% on Wednesday. Prior to the sale, multiple analysts weighed in on what, exactly, would happen if it went through. Some were confident that it would have little to no bearing on Tesla as a company.
Elon Musk sells around $5 billion of Tesla stock. Here’s what you need to know. https://t.co/FcFw33l3zo
— CNBC (@CNBC) November 11, 2021
“The stock is pretty liquid and its not a huge percentage of total issued shares, so it shouldn’t have that much of an impact … we’re quite comfortable with the outlook for the business,” said Mark Arnold, chief investment officer at Hyperion Asset Management.
Others were more concerned that a large sell-off would affect consumer confidence in CEOs. “Individuals like Elon Musk, like Jeff Bezos have transformed life, and we want to keep them in control of their companies, as long as they’ve got the energy and the ambition to keep moving the business forward,” Citadel CEO Ken Griffin said at the DealBook Online Summit.