Elon Musk’s social network poll backs stock sale

Tesla CEO Elon Musk tweeted on Saturday that he would offload 10% of his stock if users of the social media network approved the proposal

Tesla shares dropped sharply on Monday after CEO Elon Musk surprised his Twitter followers with a strange proposal: He offered to sell 10% of his stock and put the decision up for a poll.

The tweet on Saturday came after a recent proposal by Sen. Ron Wyden, D-Ore., to tax investments every year for the country’s billionaires. That would have marked an unprecedented step, given the U.S. only taxes stock investments when they are sold.

Musk, the world’s richest person, tweeted on Saturday that he would offload 10% of his stock if users of the social network approved the proposal.

The Twitter poll asking Musk’s followers if he should sell stock garnered more than 3.5 million votes, and 57.9% of people voted “Yes”.

Tesla’s shares listed in Frankfurt were down 7.9% at 980 euros at 0731 GMT. Its U.S.-listed shares are up 73.2% so far this year, compared with a 23.9% increase in the Nasdaq Composite index.

Musk had previously said he would have to exercise a large number of stock options in the next three months, which would create a big tax bill. Selling some of his stock could free up funds to pay the taxes.

I was prepared to accept either outcome, Musk said, after the voting ended. Market participants expected speculators would try to front-run his selling.

In the three months to Nov. 4, company insiders at Tesla sold $259.62 million worth of shares, excluding dispositions of indirectly held shares, according to Refinitiv Eikon data.

Tax experts, however, have noted Musk would have likely had to sell a number of his shares because of how of the way some of his expiring stock options are structured. The taxes owed could be substantial, reaching more than $15 billion according to a CNBC report.