Expect increased volatility and high sales volumes as Elon Musk considers liquidation of 10 percent of his Tesla stake
Elon Musk, the richest person in the world, lit up the fintwit space in his usual style just a few hours ago when he publicly deliberated on the sale of a large Tesla stake (NASDAQ: TSLA).
Namely, Elon Musk has now opened a Twitter poll on the subject. In addition, the ultra-billionaire assured that he would respect the results of the poll:
There has been a lot of talk lately about unrealized gains as a means of tax evasion, so I am proposing to sell 10% of my Tesla shares.
Do you support this?
– Elon Musk (@elonmusk) November 6, 2021
Keep in mind that according to the latest Form 13G / A filed with the SEC, Elon Musk currently owns 22.4% of Tesla, which translates to 227.131 million beneficially owned shares. Therefore, 10% of this stake is equivalent to 22.71 million shares and would be worth more than $ 27 billion. This magnitude of liquidation, while not catastrophic, can lead to increased volatility as well as high sales premiums in the short term. Of course, the billionaire also owns a significant stake in SpaceX. However, the space company is still private and therefore falls outside the scope of this tax proposal.
Elon Musk currently has a net worth of $ 318 billion. Of that amount, more than $ 270 billion comes directly from its stake in Tesla. The crux of this case revolves around a proposal by Senate Finance Committee Chairman Ron Wyden that would expand the scope of federal long-term capital gains to include unrealized gains in public companies for people with more than $ 1 billion in assets or more than $ 100 million in income. for three consecutive years. Basically, in line with the plan’s vision, in the first year of activating this provision, all ongoing and eligible unrealized gains would be subject to tax, not just those accrued in the previous year.
Another interesting development, Kimbal Musk – Elon Musk’s brother – filed a Form 4 with the SEC just hours before the Tesla CEO took to Twitter. According to the record, Kimbal liquidated 88,500 Tesla shares worth more than $ 108 million.
Of course, today’s development isn’t the only eccentric coming from Elon Musk in recent times. A few days ago, the director of the United Nations World Food Program (WFP), David Beasley, called on the world’s billionaires to help fight hunger. Tesla’s CEO has pledged to sell $ 6 billion worth of stock if Beasley could articulate how the amount would rectify world hunger.
If WFP can describe on this Twitter thread exactly how $ 6 billion will solve world hunger, I’m going to sell Tesla shares right away and do it.
– Elon Musk (@elonmusk) October 31, 2021
According to a Washington Post table, 42 million people around the world are currently on the brink of famine due to famine. Elon Musk’s $ 6.6 billion contribution could provide a meal of $ 0.43 for all of these people for the next 365 days, effectively eliminating this suffering at least in the short term.