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Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and … [+]
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Tesla CEO Elon’s Musk’s outlandish tweets over the weekend about selling 10% of his stake in Tesla are sending the stock in a tailspin.
Tesla shares tumbled nearly 10% as of 1:30 p.m. ET Tuesday to $1,044.96 per share, erasing $145 billion in market value for the electric car maker. It’s the second day of declines; Tesla is down 14% since Monday morning, though the company’s market cap still sits above $1 trillion and its shares are still up 148% over the last year.
Musk’s fortune fell $28.5 billion as of 1:30 p.m. ET Tuesday as a result of the plunge, pushing his net worth to $277.4 billion, down from $304.3 billion at the close of trading on Monday. He’s still the richest person in the world, according to Forbes, ahead of Amazon founder Jeff Bezos, the world’s second-richest person at $204.1 billion. Musk became the richest person to ever walk the planet last week when his fortune reached $300 billion for the first time.
The decline in Tesla shares started after Musk created a Twitter poll over the weekend asking if he should sell 10% of his stake in Tesla, prefacing the suggestion with a statement about taxes: “Much is made lately of unrealized gains being a means of tax avoidance.” . It was a response to a failed Democratic proposal last month to tax billionaires’ unrealized gains in public companies as a means of harvesting tax income from billionaires. Since Musk doesn’t get a paycheck from Tesla, he doesn’t have to pay federal taxes on his massive fortune—most of which sits in his 23% stake in Tesla—unless he cashes out his shares. “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,” Musk tweeted Saturday.
Nearly 58% of users voted yes in the poll, but he hasn’t actually gone through with the transaction yet. If he does, Musk would owe nearly $5 billion in capital gains taxes to the federal government. It’s likely he’ll use the proceeds to pay additional taxes to exercise a tranche of Tesla stock options that expires next year.