Tesla shares came under pressure Monday after millions of Twitter users polled by CEO Elon Musk concluded he should sell 10 percent of his stake in the electric car maker.
The 24-hour poll, conducted over the weekend, is Musk’s latest ploy to delight fans but risks controversy. When announcing the poll on Saturday, Musk said on Twitter that he would stick to his findings.
The Tesla chief’s decision to open up the Twittersphere over the sale of more than $20 billion in stock comes as the question of how to tax billionaires has gained some political momentum in the United States.
By early Monday in New York, Musk, who has 62.7 million followers on Twitter, was yet to respond to the poll result in which 58 percent of the 3.5 million who voted said the entrepreneur should sell the stake.
Shares of Tesla, which have jumped nearly 70 percent this year, have rocketed the group’s value to more than $1 trillion, just over 5 percent in pre-market trading in New York.
The online poll split opinion. Some heralded the potential benefits if Musk sold, while others speculated that the 50-year-old, who follows Twitter dwarfs other business leaders, was simply seeking support for a sale he might have wanted to make anyway.
“On the surface, that’s great news, you get more cash and the billionaire pays taxes,” said Philip Hoshua, an auto analyst at Jefferies, who believes Musk will keep his promise to sell.
That would be harmful to [Musk’s] Picture if he doesn’t keep selling stock, Hoshua added.
Musk indicated at a conference in September that he is likely to sell shares in the fourth quarter because he has options that expire early next year.
If it goes ahead, the vote will see a huge block of Tesla shares enter the market. Based on Friday’s closing price, Musk’s 17 percent stake in Tesla was $208 billion. He did not indicate when or how he would dispose of the stock.
The rapid rise in Tesla’s stock has made Musk billions of dollars through a controversial compensation package agreed three years ago, under which he was able to exercise large tranches of stock options when the automaker achieves certain performance goals and its shares reach predetermined levels. .
The Tesla chief also said earlier this month that he was open to selling $6 billion in stock and donating the proceeds to the World Food Program but only if the organization told him how it would use the money to end poverty.
His use of Twitter has set Musk, who currently bills himself as “Lord Edge” on the platform, apart from other business executives, but it has also come under scrutiny by regulators, particularly regarding the 2018 tweet that he received “secured funding” for taking Private company.
In 2019, Musk agreed to a deal with the US Securities and Exchange Commission regarding new restrictions on his use of social media.
Jefferies’ Houchois believes Musk will “continue to push boundaries” on social media as “nothing has exploded in his face yet”.
With Richard Waters reporting in San Francisco