Elon Musk loses $50 billion after posting ‘most expensive tweet in history’

Elon Musk’s brother reportedly sold $US109 million in Tesla stock a day before what has now been branded “the most expensive tweet in history”.

Elon Musk’s brother, Kimbal Musk, reportedly sold Tesla shares a day before his brother, infamous Twitter poll tanked the share price.

Bloomberg reported that Kimbal Musk, 49, sold 88,500 Tesla shares on November 5 for about $US109 million ($A150 million).

Tesla has not responded to a request seeking comment about the sale of the shares.

The Tesla boss posted a poll asking his 64 million followers whether he should sell off 10 per cent of his stock, as the US’s "billionaire tax" targeting the top 1 per cent’s growing wealth pool gains traction.

The post, now being dubbed online as “the most expensive tweet in history”, sparked a chain reaction, sending the electric car company’s stock into free-fall.

According to Bloomberg, Mr Musk’s $50 billion hit marks the biggest two-day decline in the history of the Bloomberg Billionaires Index. It is also the biggest one-day fall after Amazon founder Jeff Bezos’s $US36 billion ($A49 bn) hit following his 2019 divorce from MacKenzie Scott.

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?

— Elon Musk (@elonmusk) November 6, 2021

Tesla has lost $200 billion in value since Elon Musk’s tweet.

This will go down in history as the most expensive tweet. pic.twitter.com/aMDMasiCFu

— Fintwit (@fintwit_news) November 10, 2021

According to Matt Portillo, an analyst at Tudor Pickering, the company’s stock was already “extremely overvalued”.

“The stock is extremely overvalued from a long-term perspective, and investors are struggling with the valuation,” he said.

Head of Scion Asset Management Michael Burry, who is best known as the man who predicted America’s 2008 housing crisis, said the Tesla CEO could be in a sticky situation in regards to tax-free cash he took out in the form of personal loans earlier this year.

"Regarding what Elon Musk needs to sell because of the proposed unrealised gains tax, or to #solveworldhunger. There is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th," the investor tweeted.

Despite the latest tumble, Tesla is still up by a whopping 45 per cent this year, and is still treading water above $1 trillion in market value, a figure the company met in October 2021.

Elon Musk, speaks during Satellite 2020 at the Washington Convention Centre on March 9, in Washington, DC. (Photo by Brendan Smialowski / AFP)

More than 3.5 million people voted in the recent Musk poll, with 57.9 per cent voting yes, he should sell the shares. “I was prepared to accept either outcome,” Mr Musk said afterwards. The poll was widely interpreted as a response to the proposed “billionaires tax” being pushed by US Democrats.

Mr Musk did not confirm when he would be selling his shares but confirmed the sale was his only way to settle his account with the taxman.

“Note, I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock,” he tweeted.

Oregon Senator Ron Wyden responded to Mr Musk’s poll by writing, “Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the billionaires income tax.”

Mr Wyden has been an enforcer for the new legislation to tax billionaires, who he said have enjoyed dodging the tax office for far too long, especially after dizzying figures released this year revealed the combined wealth of the world’s billionaires had topped $US10 trillion ($A13.5 tn).

“There are two tax codes in America. The first is mandatory for workers who pay taxes out of every paycheck. The second is voluntary for billionaires who defer paying taxes for years, if not indefinitely,” he said in October.

“The billionaires income tax would ensure billionaires pay tax every year, just like working Americans. No working person in America thinks it’s right that they pay their taxes and billionaires don’t.”

Incredibly, Musk’s massive tumble still keeps him on top of the world’s richest list, sitting comfortably in front of Amazon’s Mr Bezos to the lazy tune of $US83 billion ($A113 bn). Musk recently widened his gap on his peers to a whopping $US143 billion ($A194 bn), briefly seeing his wallet bulge beyond the combined wealth of famous billionaires Bill Gates and Warren Buffett.

At the time of writing, he is still up 70 per cent for 2021.