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HIGHLIGHTS
- Shares of Tesla declined over 5% in pre-market trades on Monday
- Nearly 58% of votes on Musk’s Twitter poll have suggest Yes to stake sale
- Elon Musk collectively owns a 23% stake in Tesla
Shares of Tesla Inc (NASDAQ:TSLA), declined more than 5% in the pre-market trades on Monday, 8 November, after the Twitter poll launched by Co-founder and CEO Elon Musk received majority of votes suggesting a ‘Yes’ to his query of offloading 10% stake of the electric vehicle manufacturer and clean energy corporation.
Musk has been one of the early-stage investors in Tesla before its debut in the capital markets. Shares of Tesla have risen exponentially in the recent past, steering Musk on the top of the worldwide list of billionaires, over and above the Amazon’s Co-founder Jeff Bezos, Microsoft’s Bill Gates, LVMH CEO Bernard Arnault and Berkshire Hathaway CEO and the most celebrated investor Warren Buffett.
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The stock of Tesla touched an intraday low of $1,137.5, down 6.92% from the previous close of $1,222.09 in the pre-market deals on Monday, at Nasdaq.
In a Twitter poll, Elon Musk asked the community users whether he should sell 10% of his holding in Tesla stock. Following the tweet coming from the world’s richest person, the poll garnered more than 35 million votes. Of the total, 58% has supported Musk’s proposal of selling a 10% stake of the largest car maker by market capitalisation. Musk has made it quite clear by saying that he will abide by the results of the poll, whatever it suggests at the closure of votes.
Subsequent to the surprising revelation by Elon Musk, a considerable proportion of investors looks seemingly unnerved by such a proposal from the Co-founder, at a time when the largest of economies are working very hard to capitalise on the green technology and widespread uptake of the offerings in the electric vehicle (EV) space.
However, the stock partly recovered the losses of the pre-market trades and was oscillating 4.57% lower at $1,166.25 apiece, during the terminal hour of pre-market trading in the United States.
While launching the poll on Twitter, Musk also said that much has been made lately as far as the unrealized gains are concerned. In the same thread, Musk has revealed that he doesn’t draw any cash salary or bonus from any of its businesses or corporate interests. As a consequence of which, selling a portion of stock remains the only way for him to service the tax liabilities.
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Earlier this year, Musk has disclosed that a huge tax bill is likely to generate as he would be obligated to exercise a substantial number of stock options in the upcoming three-month period.
Elon Musk collectively owns a 23% stake in Tesla in the form of the common stock and stock options. At the end of 30 June 2021, Musk held approximately 170.5 million shares of Tesla. Offloading a stake close to 10% would translate into an amount nearly equal to $21 billion as per the Friday’s closing prices.
