Elon MuskHis assets may already have been sold. Tesla shares even if he hadn’t issued an unusual TwitterTake a pledge for the weekend Mr. MuskOn SaturdaySurvey TwitterUsers on whether to sell 10% of the company’s stake. TheThe poll was a response to an a DemocraticTax the billionaires’ unrealized profits
“MuchUnrealized gains are a way to avoid tax, and I suggest selling 10% of my assets. Tesla stock,” he tweeted. Mr. MuskHe said that he raised the question to clarify his position on not taking a salary in cash. Tesla’s chief executive, and therefore wouldn’t have any way to pay a large tax bill without selling some of his TeslaShares, which account for the bulk of his wealth.
Mr. Musk wrote in a follow-up tweet that he would “abide by the results of this poll, whichever way it goes.” Tesla’s shares fell nearly 5 percent on Monday.
HeThe poll was closed SundayAfter almost 3.5 million votes were cast, and with 58% voting to him sell, Mr. Musk hasn’t confirmed what he will do, but after closing the poll, he tweeted, “I was prepared to accept either outcome.”
Either way, Mr. MuskHe may have to soon sell large amounts of his shares. HeHolds nearly 23,000,000 stock options, which were issued in 2012. ThoseOptions have been vested since then and expire in August 2022. Most stock grants allow executives to avoid paying taxes for years, and perhaps forever, as long as they don’t sell the shares they get from converting the option.
But Brian FoleyAn executive compensation consultant says the reason for this is because of the large size Mr. Musk’s grant and the way it was structured, much of his 2012 options aren’t likely to qualify for the preferential tax treatment. ThatWhat does it mean? Mr. MuskHe would have to pay income taxes if he used the grant. This amount, at current prices, would only be about $30 billion. His tax bill could top $10 billion, depending on what percentage of the options didn’t qualify for the preferential treatment.
“They are a ticking tax time bomb,” Mr. FoleyIt was said that Mr. Musk’s stock options. “Offhand I can’t think of any way for him to get around paying the tax.”
What’s more, Mr. MuskHis tax bill may require him to buy more shares. HeOwns 17% of Tesla’s shares, which are currently worth about $200 billion. ThatThis means that his tweets on weekends are an attempt to pledge $20 billion in sales Tesla’s shares.
ThePossibilities of sale may rise Tesla’s stock when many analysts say it is already overvalued. The company’s market value recently crossed $1 trillion, making it one of only five U.S. publicly traded companies worth that much.
Nonetheless, James CoxA professor at Duke Universityan expert in securities law, who is a graduate of law school, suggested that this might prove difficult. Mr. MuskRetire from his Twitter pledge.
“It’s a no-win situation,” Mr. Cox said. “InThe problem with the securities law is that it could be misinterpreted as an intentional misrepresentation intended to deceive if another shareholder sells on Musk’s tweet.”
But Mr. CoxThe chief executives of the company are permitted to change their minds and make statements, but they must be true to what they have said.
ItThis would not be the second time. Mr. MuskHis tweets had caused him to get into serious trouble. InHe and in late 2018 TeslaSettlement of a case by The Securities Exchange CommissionWithout admitting guilt for tweeting about the possibility of a sale TeslaThis has never occurred. Mr. MuskIn 2018, he was sued for defamation after calling out a diver who helped to rescue children trapped in a cave. Thailand a “pedo guy” on Twitter. Mr. MuskHe won the suit.
Daniel IvesA stock analyst at Wedbush SecuritiesFollowers TeslaThe name of the company is Mr. Musk’s latest Twitter pledge “bizarre,” but said he thought that the stock, which is up more than 60 percent this year, would keep climbing even with Mr. MuskA portion of his assets can be resold. Tesla’s prospects and the investor enthusiasm for the company.
“MuskMost likely to be sold some of his items TeslaStock was in short supply before the year ended, but nobody could have imagined that there would be an abundance of stock. Twitter poll translating into a 10 percent sale of his ownership,” Mr. Ives said. “This weekend’s TwitterThe poll wasn’t even for the right reasons. Elon.”
Source: NY Times
