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Tesla Drops as Elon Musk Proposes to Sell 10% Tesla Stake After Twitter Poll


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Tesla (TSLA) Analysis & News:

  • Elon Musk Proposes to Sell 10% Stake in Tesla in Twitter Poll.
  • Poll Result in Favour of “Yes”
  • Tesla Gaps Lower by 7.5%, But Don’t Rule Out Quick Recovery.

Tesla renews lobbying efforts to open more retail stores in New Jersey

Over the weekend, Elon Musk took to Twitter to tweet a poll, saying that “much is made lately of unrealised gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock”. He added that he would abide by the results of the poll. As such, the final results of the poll with 3.5mln votes showed 57.9% in favour of “Yes”.

Musk to Sell 10% of his Stock in Tesla?

Tesla Drops as Elon Musk Proposes to Sell 10% Tesla Stake After Twitter Poll

Source: Twitter

A reminder that, with the company market cap recently breaking $1trillion, 10% of Elon Musk’s Tesla stock is equivalent to $21bln, given the 170.5mln shares that he holds. To add to this, Elon Musk noted that he has taken no salary or bonuses from any of his companies, but instead has received compensation packages, which have given him the ability to exercise stock options when performance targets are reached. This will be the case next year, where Elon Musk has an option expiring next August, giving him the right to purchase 22.86mln of Tesla stock at $6.24/shr, significantly lower than the most recent closing price of $1222/shr.

On the back of Elon Musk’s poll, Tesla’s stock on the German exchange has opened lower by 7.5%. However, the stock is only trading at levels last seen on Wednesday and in fact, the decision to be this open about offloading some shares will perhaps ease investors concerns as opposed to reports of insider selling. Therefore, while the stock is notably lower this morning, I would not be surprised to see Tesla back to pre-Poll levels by the end of the week.

Tesla Share Price: 30-Minute Chart

Tesla Drops as Elon Musk Proposes to Sell 10% Tesla Stake After Twitter Poll

Source: IG

This is not the first time that Elon Musk has taken to Twitter regarding Tesla shares and certainly will not be the last time. A reminder that, back in May 2020, Elon Musk Tweeted that “Tesla stock price too high IMO", when the share price was at $150 and while the reaction saw a 10% pullback, shares recovered and are now 700% higher since then.

Elon Musk Tweeting When Tesla Traded $150/shr

Tesla Drops as Elon Musk Proposes to Sell 10% Tesla Stake After Twitter Poll

Source: Twitter

Going forward, Tesla watchers will be firmly fixed on Musk’s reaction to the poll given that there is little known about how the CEO would offload his 10% in the company and over what period.

 

By Justin McQueen, Strategist, 8th November 2021. DailyFX

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