- In a Twitter poll launched Saturday, Musk said: "Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?"
- The billionaire gave people the option to vote "Yes" or "No" and pledged to abide by the results of the poll, whichever way it went.
- Some 3,519,252 people responded, and 57.9% of them voted for "Yes."
It comes after Musk asked his 62.5 million Twitter followers to determine the future of a chunk of his Tesla holdings.
In a Twitter poll launched Saturday, Musk said: "Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?"
The billionaire gave people the option to vote "Yes" or "No" and pledged to abide by the results of the poll, whichever way it went.
Some 3,519,252 people responded, and 57.9% of them voted for "Yes."
Musk previously said he was likely to sell "a huge block" of his shares in the fourth quarter.
In September, Musk said at the Code Conference in Beverly Hills, California, that his marginal tax rate will be more than 50% when his stock options expire at Tesla, and that he was already planning to sell soon.
"I have a bunch of options that are expiring early next year, so ... a huge block of options will sell in Q4 — because I have to or they'll expire," he said.
Jefferies raised its price target for shares of Tesla from $950 to $1,400 in a note Monday.
Analyst Philippe Houchois wrote, "Without dismissing execution risk, Tesla is getting to a position where it can balance affordability and speed, goals which are as important as profitability in Elon Musk's vision."
He added, "Tesla looks set to gain share from large OEMs [original equipment manufacturers], potentially claiming a disproportionate share of the industry profit pool in the coming 3-5 years as legacies enter the margin dilutive EV transition phase."
Other current and former Tesla board members, including Robyn Denholm, Kimbal Musk, Ira Ehrenpreis and Antonio Gracias have also offloaded hundreds of millions of dollars worth of Tesla shares since Oct. 28, as the company's stock soared on the Nasdaq stock exchange.
The shares climbed after Tesla posted a record third quarter and car rental company Hertz announced that it was ordering 100,000 Tesla vehicles for its fleet. Musk waited for a week after Hertz made its announcement to say that Tesla had not in fact signed a contract with the company yet. Before that statement, he taunted investors who were short shares of Tesla on Twitter, writing: "Tesla Hertz shorts."
Since the Hertz announcement, Tesla shares have risen by more than 30% and so has Musk's net worth.
Elon's tax bill
No matter the results of the Twitter poll, Musk would have likely started selling millions of shares this quarter. That's because he's facing a looming tax bill of more than $15 billion.
His options expire in August 2022 but in order to exercise them, he has to pay the income tax on the gain.
Since the options are taxed as an employee benefit or compensation, they will be taxed at top ordinary income levels, or 37% plus the 3.8% net investment tax. He will also have to pay the 13.3% top tax rate in California since the options were granted and mostly earned while he was a California tax resident.
Combined, the state and federal tax rate will be 54.1%. So the total tax bill on his options, at the current price, would be $15 billion.
Musk, who is also CEO of SpaceX and brain-computer interface start-up Neuralink, hasn't confirmed the size of the tax bill. However, he tweeted: "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."
In October, Democrats proposed a tax on billionaires' investment gains annually to help finance President Joe Biden's $1.75 trillion social and climate package. The so-called billionaire's income tax would also close a loophole that has enabled the hyper-wealthy to defer capital gains taxes indefinitely, a strategy known as "buy, borrow, die."
Senate Finance Committee Chairman Ron Wyden, D, Ore., who formally floated the billionaires' income tax proposal, wrote in a Tweet this weekend, "Whether or not the world's wealthiest man pays any taxes at all shouldn't depend on the results of a Twitter poll."
Musk, who has vociferously objected to the proposal, responded to Wyden on Sunday with a coarse retort.
According to the Bloomberg Billionaires Index, Musk is currently the world's richest person, ahead of Amazon founder Jeff Bezos and French retail tycoon Bernard Arnault. The index states that Musk's net worth is $338 billion.
Of his considerable Tesla holdings, Musk has options for 22,862,050 shares at $6.24 due to expire on Aug. 13, 2022. These options were awarded to him in 2012.