Tesla shares sink as Twitter users back Musk's 10% stock sale

·3 min read
Elon Musk
Elon Musk owns 23% stake in Tesla. Photo: Patrick Pleul/AFP via Getty Images

Tesla (TSLA) boss Elon Musk is set to sell 10% of his stock in the company, worth $21bn (£15.6bn) following a Twitter poll he ran at the weekend.

"Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock," he tweeted. "Do you support this?"

3.5 million twitter accounts voted 57.9% in favour of the move.

Musk, who is the world's richest man, launched the poll in response to criticism he did not pay enough tax, promising to abide by the result. Forbes said the stock sale would be at least in the 20% range for capital gains tax. 

"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," Musk tweeted.

Watch: Twitter users tell Musk to sell Tesla shares

Shares fell 7.6% in early trade on Germany's Tradegate index on Monday.

It headed past a trillion dollars in market cap in late-October, joining an elite club including Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Google's Alphabet (GOOG).

Some of Tesla's board members, including his brother Kimbal Musk, sold large numbers of shares after the stock hit a record high in late October.

It is the latest example of crowd-sourced decision making from the billionaire, whose tweets have moved both the stock price and the price of cryptocurrency bitcoin (BTC-USD) in the past. 

Read more: European stocks mixed ahead of another big week of data releases

Musk recently said on Twitter he'd sell $6bn in Tesla stock and donate it to the World Food Programme, provided the organisation would be more transparent about how the money is spent. 

“It’s highly unusual for a business leader to canvas social media for opinions over share ownership but Musk has always liked to do things in the public eye," said AJ Bell investment director Russ Mould.

“He is so rich that he probably doesn’t care if his actions cause the Tesla price to fall a bit. However, he also has a duty to act in shareholders’ interests which he hasn’t done in this situation because the incident has already destabilised the company’s valuation.”

Some analysts said that, while a huge stock offload is usually seen in a negative light by shareholders, the 10% stock sale would not necessarily move the needle for the company. 

Demand remains high for Tesla shares among both institutional and retail investors, Dan Ives, an analyst at Wedbush Securities told Bloomberg. 

Others said that it could lead to short sellers targeting the company. 

Watch: Tesla, Uber tie-up in London for electric rides

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting