Elon Musk is known for being vocal on the microblogging platform Twitter, where he has almost 63 million followers. He is now asking these followers to decide on something. Musk proposed selling 10 percent of his Tesla stock and asked his followers to determine the future. He started a Twitter poll where he wrote – “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?” After starting the poll, Musk said that he would abide by the results of the poll, no matter what the outcome will be. However, a few minutes later after starting the poll, Musk said in a Twitter thread that he does not take cash salary from the company or even any kind of bonus. “Therefore, I will have to sell my stock as this is the only way in which I can pay taxes,” he said. But the poll seems to be just a formality as Musk had previously stated that was likely to sell a major chunk of his options in the fourth quarter. Musk has 170.5 million shares of Tesla and therefore the amount of stock that he is talking about would be worth USD 21 billion. The stocks of Tesla have surged as much as 74 percent this year and recently closed at USD 1,222.
While making an appearance during the Code Conference in September, the Tesla CEO said that his marginal tax rate would be something over 50 percent when his stock options expire at the company and that he was already planning to sell soon. “There are some options with me that will expire early next year. So, I will sell a huge block of options in the fourth quarter as this is the only option I have. Otherwise, they will expire,” he had said. It must be noted that many presents and former board members of the company have also sold their Tesla shares in the past over one week. Robyn Denholm, Ira Ehrenpreis, Kimbal Musk, and Antonio Gracias sold stocks worth hundreds of millions of dollars. So, irrespective of the outcome of the Twitter poll, it’s almost certain that Musk would sell those stocks. Luckily, A majority of Twitter users who participated in the poll voted in favor of Musk. 58 percent of 3.5 million Twitter users said that Musk should sell 10 percent of his stocks. “I was prepared to go with the outcome of the poll,” Musk tweeted after the poll got closed at around 2:15 pm.
According to reports, the total fortune of Musk is around USD 338 billion and around one-quarter of this is Tesla stock options. Musk is free to sell those options any time. Musk had received two big awards. One was in 2012 while the other was in 2018. The older will expire in August 2022. However, there are many who believe that Musk started the Twitter polls as he has faced criticism for not paying a fair share of taxes. Ultra-rich people like Musk often benefit from tax-avoidance strategies that are not offered common man whose main source of income is from conventional wage. Billionaires’ wealth is often largely based on stock and real estate and both of them are not considered taxable unless those assets are sold. Earlier this summer, an investigative news site found that the income tax bill of Tesla CEO amounted to zero in 2018. Recently, Musk moved to Texas because it has no state personal income tax. But time and again people have been pointing out this as his wealth has ballooned with a huge increase in the market value of Tesla. Shares of the company reached to record high recently when a car rental company Hertz said that it will order 100,000 electric vehicles for its fleet. Since this announcement, shares of Tesla increased as much as 34 percent. However, Musk later clarified that the company has so far not signed any contract with the rental car company. Despite this, Hertz said that the delivery of cars by Tesla has already started.
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