Elon Musk’s Twitter Poll Results Favor Tesla Stock Sale

Twitterati vote Musk should sell 10% of his Tesla stock, after the billionaire CEO polled them and pledged to abide by the outcome.

Selling shares could weaken Elon Musk’s control over Tesla, as the company lacks a dual-class of stock ownership that gives founders supervoting power over common shareholders. Picture: AFP

Twitter users said Elon Musk should sell 10% of his Tesla Inc. stock after the billionaire chief executive polled them and pledged to abide by the outcome of the vote.

Voters backed the share sale by a wide margin, with roughly 58% in favour of a sale and 42% opposed, according to the polling data posted on Twitter. More than 3.5 million votes were cast.

“I was prepared to accept either outcome,” Mr. Musk tweeted after the poll closed.

I will abide by the results of this poll, whichever way it goes

— Lorde Edge (@elonmusk) November 6, 2021

Mr. Musk on Saturday put the potential share sale up for popular vote on the social-media platform as he waded back into the debate over how some of the wealthiest Americans should be taxed.

“Much is made lately of unrealised gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” he tweeted as he launched the poll, adding, “I will abide by the results of this poll, whichever way it goes.” Mr. Musk holds more than 17% of Tesla, a stake valued at over $200 billion, according to the most recent available data in FactSet. One-tenth of that stake could be worth around $21 billion based on the stock’s Friday closing price of $1,222.09.

Mr. Musk and Tesla didn’t immediately respond to requests for comment after polling closed.

Mr. Musk doesn’t accept a cash salary from Tesla. His compensation package entitles him to stock awards. He typically doesn’t sell stock, though he has done so to cover taxes on past stock options. Tesla’s performance has entitled Mr. Musk to additional stock options this year. Selling shares he already holds could help the cash-poor billionaire exercise some of his vested options.

Tesla vehicles stand outside a Brooklyn showroom and service centre in New York City. Picture: AFP

If Mr. Musk were to sell stock, now could be a good time. The current top tax rate on long-term capital gains is 23.8%, but Congress has been considering raising it. Changes in capital-gains tax rates often take effect immediately, to prevent gamesmanship.

Tesla shares have risen about 75% over the last three months. Mr. Musk routinely makes unusual pronouncements on Twitter, where he now has more than 62 million followers.

Last week, the Tesla boss raised doubt about a deal between the car maker and Hertz Global Holdings Inc. when he tweeted that no contract had been signed in connection with the car-rental company’s announcement of a 100,000-car order. Last year, he tweeted that he thought Tesla’s stock was too high, sending shares lower. In 2018, he tweeted he might take Tesla private and had “funding secured” for the deal, spurring a Securities and Exchange Commission investigation. Mr. Musk agreed to pay a $20 million fine and relinquish his chairman title.

Am considering taking Tesla private at $420. Funding secured.

— Lorde Edge (@elonmusk) August 7, 2018

“Some people use their hair to express themselves. I use Twitter,” Mr. Musk said at a recent conference.

Mr. Musk, considered the world’s richest person after a surge in the value of his Tesla stock, previously blasted a proposed tax on billionaires that would have subjected some holdings of about 700 Americans to annual capital-gains taxes on increases in value.

“Eventually, they run out of other people’s money and then they come for you,” Mr. Musk wrote on Twitter last month.

Exactly. Eventually, they run out of other people’s money and then they come for you.

— Lorde Edge (@elonmusk) October 26, 2021

The plan would have taxed the billionaires’ unrealised gains on publicly traded assets, so they would have owed tax annually on rising values whether the assets were sold or not. (Losses would have offset gains.) This change would have effectively eliminated the billionaires’ ability to defer capital-gains taxes indefinitely.

The plan drew strong opposition and was dropped soon after it was proposed in late October. Opponents feared that the tax could be broadened to apply to the assets of less-wealthy taxpayers, among other things.

In a tweet Saturday he said, “the only way for me to pay taxes personally is to sell stock.”

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.

— Lorde Edge (@elonmusk) November 6, 2021

Mr. Musk in September said he “would prefer to stay out of politics” after Texas Gov. Greg Abbott, a Republican, said the billionaire supported the state’s social policies. Mr. Musk, who has since said he would move Tesla’s corporate headquarters from California to Texas, has become increasingly critical of the Biden administration after his car company wasn’t invited to a White House event aimed at accelerating the adoption of electric vehicles.

Selling shares could weaken Mr. Musk’s control over Tesla. Unlike Facebook parent Meta Platforms Inc. and Google parent Alphabet Inc., Tesla lacks a dual-class of stock ownership that gives founders supervoting power over common shareholders.

Mr. Musk has some personal loan obligations pledged against his Tesla stock, according to a company regulatory filing.

--Laura Saunders and Richard Rubin contributed to this article. Write to Rebecca Elliott at [e-mail] (END) Dow Jones Newswires November 07, 2021 15:12 ET (20:12 GMT) Copyright (c) 2021 Dow Jones & Company, Inc.

WSJ