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  • Chris Bratton - Tech Journalist

Tesla CEO sells 10% of his shares worth $5 billion after Twitter poll

Tesla CEO Elon Musk is quite respectful of public feedback, which certainly reflects on his socials. In a recent poll, he asked if people are interested in 10 per cent of his shares in the market. 57.9 per cent of 64.3 million followers agreed that he should sell those Tesla shares. In return, the largest electronic car manufacturing company had a price fall of shares by 16 per cent, which was quite inevitable. Though it will sustain automatically, we’ve seen dramatic moments regulated by Mr Musk.

Ten per cent of those shares are worth $5 billion after the price fall. Tesla car production company as a whole is worth more than a trillion-dollar which puts it as one of the most important assets of the country. So, there are many regulatory challenges in terms of how shares should undergo. Elon Musk became the worlds richest man as part of being the CEO and founder of Tesla and SpaceX. After his tweet, 4.5 million shares entered the market, which dropped share prices to a negative 16 per cent.

In five years, these are the first batch of Elon’s share sales. Another set of 934,000 shares is sold, evaluated about $1.1 billion after 2.2 million share acquisitions. Within Tuesday and Wednesday, these shares were dumped on the market and was a good opportunity for both existing and new investors to grab some new shares. At the moment, Mr Musk holds about 166 million Tesla shares, according to the United States Securities And Exchange Commission’s SEC Form 4.

Before deciding on selling the shares, Elon Musk asked his 64.3 million Twitter followers on deciding for him. In response, he ended up selling a significant chunk of his common shares to the market. However, according to SEC Form 4, one of each five shares were pre-planned for sale, as pre-arranged trading plans came up in September. It was before Elon decided to make a post about what to do. Regulatory filings showed that the other four of each five shares were not scheduled previously, making the voting count legitimate. Elon is paid by shares, not cash, which helped obtain additional shares periodically even though he owns most of the stock.

Another option remains, according to BBC, that Mr Musk can buy 22.86 million Tesla shares back, each costing $6.24, but it’s bound to an expiry date. Chief market strategist at National Securities in New York, Art Hogan, said: “Elon Musk doesn’t take a salary; he’s paid in big chunks of stock. At some point in time, you have to take some of that concentration down.” He also talked about Elon’s move as US Democrats have proposed a so-called ‘billionaires’ tax’ and ‘unrealised gains.’

Elon Musk currently owns a 23 per cent stake in Tesla, and it was before the share sell in accordance to the poll: “Much is made lately of unrealised gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.”

The current board includes chairwoman Robyn Denholm, Musk’s brother Kimbal Musk, Ira Ehrenpries, and Antonio Gracias. They also offloaded hundreds of millions worth of Tesla shares since October as the company evaluation reached $1 trillion. Before Musk tweeted, his brother Kimbal Musk sold around $109 million value of shares, and the news gets quite interesting regarding these happenings.

The last time Mr Musk sold his shares was in 2016; he liquidated shares to cover $590 million in income tax. The Twitter referendum pummeled Tesla share prices, hitting a large blow to Elon’s net worth, down by $50 billion. Within a year, tesla stocks more than doubled their value with a 156 per cent rise from $417 to $1067 per share.


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