Tesla’s (TSLA) stock is falling by as much as 5% in pre-market trading – seemingly putting an end to an incredible rally. One of the key reasons appears to be Elon Musk’s announcement that he would sell 10 percent of his stake in the firm to alleviate public pressure on rich people not paying taxes. Whether or not he goes through with it, is the main question.
Tesla’s stock has been on a historic climb in recent weeks, climbing hundreds of billions of dollars and reaching $1 trillion market capitalization.
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?
— Elon Musk (@elonmusk) November 6, 2021
On Sunday, Elon Musk proposed a solution that almost certainly caused the boom to come to an end. Elon Musk announced on Twitter that he would sell 10% of his Tesla holdings if a poll on the social media site agreed, which it did.
According to a poll conducted by Twitter, over 3.5 million people voted and almost 58% of them voted in favor of selling Tesla stocks. Musk said that if the poll is approved by Twitter, he will follow through, which means he will begin selling millions of Tesla shares.
Tesla’s stock is down 5% today, which would result in tens of billions in market capitalization being erased and roughly the amount of the stake Musk is now reported to be selling.
The idea was presented as a solution to pay taxes in the middle of a campaign for ways to tax the super-rich who frequently live off of loans secured by companies’ rising stock valuations.
Will it come to fruition?