Musk should sell 10% of his Tesla stock, Twitter users say By Reuters

(Reuters) -Tesla Inc CEO Elon Musk should sell about 10% of his Tesla (NASDAQ:) stock, according to 57.9% of people who voted on his Twitter (NYSE:) poll asking users of the social media network whether he should offload the stake.

“I was prepared to accept either outcome,” Musk said, after the voting ended.

The world’s richest person tweeted on Saturday that he would offload 10% of his stock if users approved the proposal.

The poll garnered more than 3.5 million votes.

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Musk said on Saturday, adding that he does not take cash salary or bonus “from anywhere”, and only has stock.

U.S. Senate Democrats have unveiled a proposal to tax billionaires’ stocks and other tradeable assets to help finance President Joe Biden’s social spending agenda and fill a loophole that has allowed them to defer capital gains taxes indefinitely.

Musk has criticized the proposal saying, “Eventually, they run out of other people’s money and then they come for you.”

As of June 30, Musk’s shareholding in Tesla came to about 170.5 million shares and selling 10% would amount to close to $21 billion based on Friday’s closing, according to Reuters calculations.

Including stock options, Musk owns a 23% stake in Tesla, the world’s most valuable car company whose market value recently exceeded $1 trillion. He also owns other valuable companies including Space X.

His brother Kimbal Musk on Friday sold 88,500 Tesla shares, becoming the latest board member to offload a large number of Tesla stocks which hit record highs.

A week ago, Musk said on Twitter that he would sell $6 billion in Tesla stock and donate it to the United Nations’ World Food Program (WFP), provided the organization disclosed more information about how it spent its money.

Musk has previously said he would have to exercise a large number of options in the next three months, which would create a big tax bill.

He also said he did not want to borrow against stock to pay taxes because stock value could go down. If he sold some of the stocks, that could free up funds for the tax bill.

“(It) seems crazy to borrow that much to pay taxes, so I have to assume he’d need to liquidate a substantial amount of the shares purchased from the option exercise to pay taxes,” said Bryan Springmeyer, an attorney at San Francisco-based law firm Springmeyer Law.