Elon Musk sells $US5 billion in Tesla shares after support in Twitter poll

After making a promise on Twitter, Tesla CEO Elon Musk has sold about 4.5 million shares of the electric car maker's stock, raising over $US5 billion ($6.85 billion).

Key points:After polling 3.5 million Twitter users, Musk agreed to sell 4.5 million Tesla shares worth $US5 billionMusk conducted the poll after criticising a proposal by US Senate Democrats to tax billionaires' stocks He has a net worth of around $282 billion ($386.6 billion), owning 17 per cent of Tesla's stock

The 4.5 million shares equate to about 3 per cent of his total holdings in the electric vehicle manufacturer. 

Musk's trust sold nearly 3.6 million shares in Tesla, worth around $US4 billion ($5.48 billion).

He also sold another 934,000 shares for $US1.1 billion ($1.5 billion) after exercising options to acquire nearly 2.2 million shares.

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"Much is made lately of unrealised gains being a means of tax avoidance, so I propose selling 10 per cent of my Tesla stock," Mr Musk tweeted. 

Last week, Musk said he would sell 10 per cent of his holdings in the company, worth more than $US20 billion ($27.4 billion), based on the results of a poll he conducted on Twitter.

The stock sank 12 per cent on Tuesday in a multi-day sell-off but recovered 4.3 per cent on Wednesday.

The additional share sales were separate and provide Musk with sizeable reserves of cash, given his wealth is largely tied to his stakes in Tesla and SpaceX.

Musk has more than $US20 million further stock options that are due to expire in August next year.

Mark Arnold, chief investment officer at Hyperion Asset Management in California, said the sale would not endanger the company.  

"The stock is pretty liquid and its not a huge percentage of total issued shares, so it shouldn't have that much of an impact … we're quite comfortable with the outlook for the business," he said.

While Tesla lost close to $US150 billion ($205.7 billion) in market value this week, retail investors have been net buyers of the stock.

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Fifty-eight per cent of Tesla trade orders on Wednesday were for purchases, rather than sales, while retail investors made net purchases of $US157 million ($215.3 million) on Monday and Tuesday, according to Vanda Research.

Tesla is now up more than 51 per cent in 2021 due to an October rally that was fuelled by an agreement to sell 100,000 vehicles to rental car company Hertz.

Musk said he proposed selling the stock after Democrats began a push for billionaires to pay taxes when the price of their stocks increase, even if they don't sell any shares.

But the wording on unrealised gains, also called a "billionaires' tax", was removed from US President Joe Biden's budget, which is still being negotiated.

Musk was Tesla's largest shareholder in June, owning about 17 per cent of the company, according to data provider FactSet.

He is the world's richest person, with a net worth of around $282 billion ($386.6 billion), most of it in Tesla stock.

AP/Reuters

Posted 11 Nov 202111 Nov 2021Thu 11 Nov 2021 at 10:13amShareCopy linkFacebookTwitterArticle share optionsShare this onFacebookTwitterLinkedInSend this byEmailMessengerCopy linkWhatsApp

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