Elon Musk Is Using A Twitter Poll To Decide Whether He Will Sell Around $20 Billion Of His Tesla Stock

By on November 7, 2021 in ArticlesBillionaire News

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Elon Musk, who earlier this week topped John D. Rockefeller to become the richest person in history, is considering selling roughly $20 billion worth of his Tesla stock. How is he making his decision? Is he consulting with a team of the world's best financial and tax advisors? Nope. Is he discussing the implications with the Tesla board of directors? Nope.

He's using a Twitter poll.

Here it is. A Twitter poll that will decide whether or not a huge chunk of Tesla's total outstanding equity will be liquidated:

As of this writing, 6am PST on Sunday 11/7 (damn you daylight savings time), 3.1 million people have voted on his poll with 57.1% of respondents voting YES.

The poll will remain open for another four hours, until roughly 10:20 am PST.

It's not clear if Elon will sell 10% of his stake all at once or over a slow roll out. Almost certainly, he will slow-roll over a bunch of sales to prevent flooding the market and tanking Tesla's share price.

According to the company's most-recent SEC filing, there are currently 1,004,264,852 total shares of Tesla outstanding. According to a different recent SEC filing, Musk currently controls around 17% of the total shares outstanding. He technically could ultimately own 23% of Tesla when you count options that he has not received yet.

17% of 1,004,264,852 = 170,725,024 shares owned by Elon today.

If the poll ends with a YES, Elon will be selling approximately 17 million Tesla shares. Tesla's share price closed at $1,222.09 on Friday. So…

$1,222.09 * 17 million = $20,864,134,560

AKA…

$20.8 billion

As Elon points out in a follow-up Tweet, he does not receive any salary or bonus from any of his various companies. Therefore, selling stock – which creates a "realized gain"- would be the only way he could possibly pay taxes on his historically massive fortune.

Elon recently moved from California to Texas, partly to be closer to his new massive Tesla factory – which is THREE TIMES larger than the Pentagon – but also to get away from California's annoying local politicians and unfriendly business regulations. Oh, and ya… Texas doesn't levy residents with a state income tax. That's a nice bonus.

Therefore, the only tax Elon will be subject to will be the IRS' top long-term capital gains rate. That current top rate on long term gains is 23.8%.

23.8% of $20.8 billion = $4.95 billion in taxes owed to the IRS.

That would leave Elon with $15.85 billion in cash after taxes.

When Elon was a resident of California, any investment gain (short or long-term) would have been subject to its nation-leading state income tax rate. That rate is 13.3%. Had Elon conducted this poll while still being a resident of California, he also would have owed $2.7 billion in taxes to the state of California.

No word yet on what Elon is planning to do with roughly $15 billion, but he did recently get into a Twitter spat that might give us some clues. On Monday, CNN published an article titled:

"2% Of Elon Musk's Wealth Would Solve World Hunger, Says Director of UN Food Scarcity Organization"

Elon responded to the article over Twitter offering to sell $6 billion worth of this wealth if the UN's World Food Prorgramme would provide a clear plan and open source accounting of how it would use the money to solve world hunger.

A bit later, CNN edited its titled to:

"2% Of Elon Musk's Wealth Could Help Solve World Hunger, Says Director of UN Food Scarcity Organization"

So maybe Elon is putting his money where his mouth is? Or maybe he just wants to build a Scrooge McDuck pool of money at his new Texas mansion.

***Update***

The poll closed with 3.5 million votes with 58% voting YES to sell!

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