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Elon Musk Honors Twitter Poll Result, Sells $5 B Tesla Stock

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Tesla CEO Elon Musk followed through with his promise to honor a recent Twitter poll. Last Wednesday, he sold about $5 billion worth of Tesla shares. This is according to filings made on the stock sale. 

RELATED: Musk Crashes Cryptocurrency Prices With Tesla Announcement

Musk Honors Twitter Poll Results and Sold 3% of His Total Tesla Holdings

Tesla logo on a smartphone and the chart-Twitter Poll

Last Saturday, Musk started a Twitter poll where he asked users if he should sell 10% of this Tesla stock. “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” he asked in particular. When the poll ended, 57.9% of respondents voted “Yes,” while the remainder said “No.”

Immediately following the poll results, Tesla shares dropped by 13%. Stockholders engaged in a multi-day selloff that threatened the EV company’s status as a trillion-dollar company.

The stock only recovered on Wednesday, rising 4.3%. The gains started when Musk proceeded with his sale of Tesla stock. However, the total is far less than his 10% declaration. 

Musk Is World’s Richest Person at $286 Billion

Musk’s unloading of 4.5 million shares represents his first time to sell since 2016. Initially, the CEO’s trust sold around 3.6 million shares worth $4 billion.

After exercising his options to acquire around 2.2 million shares, Musk then sold another batch of 934,000 shares. This amounts to a total of 4.5 million shares sold. 

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The total represents around 3% of this total holding in Tesla. Including the recently sold stocks, Forbes estimated Musk’s net worth at $281.6 billion.

This makes him the richest person in the world. The next richest, Amazon founder Jeff Bezos, has a much lower net worth at $201.5 billion. 

Musk Planned to Sell Stock Since September

Despite the earlier Twitter poll, Musk actually indicated plans to unload some of his holdings as early as September. He already gave the green light for a trading plan that month.

This allowed corporate shareholders to set up a scheduled transaction. The filing also declared that the sales paid the associated taxes.

When asked if the trading plan has anything to do with the Twitter poll, Tesla did not respond. 

Given that Musk does not charge a salary nor collect benefits and bonuses as CEO, the recent share sales will provide him with a significant amount of cash. Musk’s net worth is largely tied up to his stock options, which also include shares in SpaceX.

Plus, the Tesla CEO is bound to enter the market again soon. He has around 20 million stock options that are due to expire by August 2022. 

Why Musk Did Not Sell 10% Like He Said He Will

Mark Arnold, chief investment officer at Hyperion Asset Management, said that selling 10% as Musk declared would be counterproductive.

Arnold said If Musk carried out the plan to sell 10%, the results would affect Tesla in a negative manner. “But the stock is pretty liquid and it’s not a huge percentage of total issued shares, so it shouldn’t have that much of an impact … we’re quite comfortable with the outlook for the business,” he added. 

Tesla actually lost around $150 billion in value this week when Musk started the Twitter poll. However, many retail buyers ended up buying the shares.

According to Fidelity, some 58% of Tesla trade orders on their site represented purchases and not sales. Vanda Research said that retail investors bought $157 million.  

Currently, Tesla is up by 51% for this year alone. The company finally joined the trillion-dollar club last month. Share prices spiked at the time.

It announced that rental car giant Hertz will be purchasing 100,000 EVs over the next few months. Tim Ghriskey, a senior portfolio strategist at Ingalls and Snyder said Tesla is doing great.

The company just posted strong results, so Tesla itself is “on fire.”

Watch the CNBC Television video asking: “​​Should Elon Musk sell 10% of his Tesla stock? Twitter users vote ‘yes’”

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