Editor's PickForexElon Musk sells $1.1bn of Tesla shares after asking Twitter followers advice

November 11, 2021

Elon Musk raised about $1.1 billion by selling shares in Tesla after consulting his social media followers about plans to offload a tenth of his stake in the carmaker.

The world’s richest man sold more than 930,000 shares, according to regulatory filings which said that transactions took place under a plan adopted in September.

Musk, chief executive of Tesla, polled users on Twitter at the weekend on whether he should sell a 10 per cent stake in the group worth about $18 billion. A majority of 3.5 million respondents voted in favour.

The stock sale on Monday took place “solely to satisfy the reporting person’s tax-withholding obligations”, a filing said.

Tesla was established in 2003 and Musk, 50, became its chief executive in 2008. An industry-wide shift away from petrol and diesel toward battery-powered cars has propelled its shares in recent years. Last month it became the first carmaker to be valued at more than $1 trillion.

The enigmatic billionaire’s unconventional approach to reducing his stake triggered a sharp sell-off earlier this week, although Tesla closed up 4.3 per cent, or $44.45, at $1,067.95 yesterday.

Musk’s method caused surprise at the weekend but analysts have been aware of his motive for some time. Tesla’s rally meant the billionaire receiving vast tranches of stock options under a controversial compensation scheme on which he would have to pay tax.

Dan Ives, of Wedbush Capital, said: “Following the bizarre Twitter poll Musk put out over the weekend on his 10 per cent ownership stake to be sold, it appears Musk walked the walk and thus has started selling Tesla shares into year-end. The question will be for investors if he sells his full 10 per cent ownership stake over the coming months or is it done piece by piece during 2022?”

Musk’s frequent posts on social media have previously landed him in hot water. In 2018, America’s Securities and Exchange Commission removed him as chairman of Tesla, fining him $20 million, and the company the same amount, over securities fraud charges. He had written on Twitter that he wanted to take the business private and had secured funding.

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