Should Elon Musk Sell 10% of His Stake in TSLA? Vote Now…
Don Peppers
Customer experience expert, keynote speaker, business author, Founder of Peppers & Rogers Group
At 12:17 PM Pacific Time today (Saturday, Nov 6), Tesla CEO Elon Musk announced on Twitter that he would sell 10% of his Tesla stake if the majority of Twitter responders say he should do it . He promises to abide by the results of this Twitter poll, which will remain open for 24 hours.
Musk’s rationale is that while he is a very wealthy man (a billionaire many times over), he receives no salary compensation of any kind. His wealth consists almost entirely of highly appreciated stock, and he only pays tax on this wealth if and when he sells some stock. So, what do people say, he’s asking: Should he sell some of this stock and generate tax revenue or not?
I’m sorry, folks, but I am truly intrigued by the creativity here, aren’t you? I mean, come on already!
On the downside, of course, if you are a Tesla stockholder (as I am), Musk’s current shareholdings amount to more than $200 billion worth of TSLA, and injecting an additional $20 billion in shares into the market will almost certainly depress the stock value, at least in the short term.
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On the plus side, however, the stock itself has experienced a fantastic rise in just the last couple of years, increasing from less than $70 a share to more than $1200 a share, so selling shares into this long-term price surge does make more economic sense. Moreover, while the government will be getting an unanticipated tax bonus of around $10 billion, Musk would also be selling his shares (if he sells) prior to the implementation of the “millionaire surtax” just passed as part of the Biden Administration’s infrastructure bill which, if he were to wait until next year to sell the shares would cost him an extra 8% in taxes .
Complicating things is the fact that Musk has millions of TSLA options that he has been granted over the years, in lieu of cash compensation. Many of these options expire within the next couple of years, so he will have to exercise them before they expire, at which point he will have to pay taxes on this long-term gain, as well.
So, should he sell now or not? Be sure to cast your vote!
En busca de nuevos retos
3 年Yo opino que no, porque si las vendiera las comprarían personas con alto poder adquisitivo ya que el precio de la acción debe ser alta. Donde si estoy de acuerdo es en la donación para acabar con la hambruna pero eso sí que deje a la ONU por fuera
Sr. Manager, Product Support Engineering at Samsung Electronics Enterprise Business Division (EBD)
3 年He will sell until price goes down to $800/share of Tesla. I bet he is offloading his crypto get the $60 B that he needs for tax.
Strategy Management technician. 20,000+ smart followers. For an example of a strong nation, look where European cities are bombed every day by Dark Ages savages. Slava Ukraini! ????
3 年Tax on future potential revenue doesn't make any sense: BILLIONAIRES TAX https://bit.ly/billionaires-tax
Strategic Business Analyst | Systems Thinker | Process Engineer | Transforming Complexity into Clarity
3 年I feel that Musk realises that his shares are overvalued, and he's employing legerdemain to obfuscate the offloading.