Tesla's shares fell about nine per cent in early trading on Monday, as the market readied for CEO Elon Musk selling off 10 per cent of the company's stock. Musk had run a social experiment on Twitter, asking random social media users whether or not he should sell off 10 per cent of his stocks (Musk himself owns 23 per cent of total Tesla stocks) . He said he would abide by the polls, whatever the end results might be. More than 52 per cent of users had voted 'yes'.
Musk's selling-off is not expected to create too big of a splash in the market as the demand is considered robust enough for the temporary dips to be eaten up.
Musk's move had political motives too. It comes amid pressure in Washington to increase taxes on billionaires like him. Some Democrats have been pushing for billionaires to pay taxes when the price of the stocks they hold goes up, even if they don't sell any shares. It is a concept called unrealised gains, and Musk is sitting on a lot of them with a net worth of roughly $300 billion.
As of June 30, Musk's shareholding in Tesla came to about 170.5 million shares and selling 10 per cent would amount to close to $21 billion based on Friday's close, according to Reuters calculations. Tesla had breached a trillion dollars in market capitalisation late in October, becoming the fifth U.S. company to join a club which includes Apple, Microsoft, Amazon and Alphabet.
