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Elon Musk Is $50 Billion Poorer Since His Twitter Poll Sent Tesla Stock Spiraling

By News Creatives Authors , in Billionaires , at January 1, 1970

Update, Nov. 16: Late on Monday, Nov. 15, new SEC filings showed that Musk exercised options to purchase an additional 2.1 million shares of Tesla stock and sold 934,091 shares, worth $944 million, to cover taxes on the transaction.

It’s been a bumpy ride for Tesla lately. Shares fell more than 15% last week in the wake of Elon Musk’s November 6 tweet that he was considering selling 10% of his stake. Tesla closed Monday down another 2%, lopping billions more off Musk’s fortune.

Musk is now worth $266.9 billion, Forbes estimates—$51.5 billion less than he was worth before his tweet sent the stock spiraling.

Musk has been dumping stock all along the way. He sold about $5 billion worth early last week, then added another $700 million in sales later in the week. Another regulatory filing, posted on Friday, disclosed a new batch of sales, totaling 1.2 million shares for more than $1.2 billion (pretax).

In all, Musk has sold about 6.3 million shares and exercised another 2.2 million options for pretax proceeds of nearly $7 billion. It’s a new tactic for Musk, who has previously called himself “financially illiquid”—most of his fortune has long been tied up in holdings of Tesla and his rocket company SpaceX rather than in cash or real estate. Before last week, the Texas-based billionaire had unloaded Tesla stock only twice: In 2010, shortly after Tesla went public, he sold roughly 1.4 million shares for $24 million, and in 2016, he sold 2.7 million shares for some $593 million, which he used to cover taxes he owed on for exercising some of his Tesla options. 

He has good reason to sell some stock: Shares have climbed a staggering 150% over the past year, even after the past week’s slide. Musk has, at times in recent years, suggested that Tesla is overvalued. Plus, a multibillion-dollar tax bill awaits the eccentric billionaire, thanks to a set of stock options set to expire in August 2022. More than $1 billion of the nearly $7 billion Musk got from selling Tesla shares has gone to pay taxes on Musk exercising the first 10% of those options. The additional shares Musk has sold could help him offset part of the tax bill from exercising the remaining options, or go toward paying down personal loans Musk has taken out against his Tesla shares. So far, Musk has sold just under 4% of his Tesla stake—not counting the new shares he’s gotten from exercising options. Wedbush analyst Dan Ives said in a Thursday note that the full 10% sale he promised to make based on his Twitter poll seems to be “all in motion.”

Musk’s transactions haven’t just caught investors’ eyes. Senator Ron Wyden (D-OR), who has called for higher taxes on the ultra-wealthy, responded to the poll: “Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the Billionaires Income Tax.” Wyden’s tweet prompted a crude reply from Musk. Fellow Senator Bernie Sanders (I-VT), a frequent critic of billionaires, also found himself caught in Musk’s Twitter crosshairs over the weekend and on Monday. “We must demand that the extremely wealthy pay their fair shares. Period,” Sanders tweeted on Saturday. The next day, Musk took aim at the 80-year-old lawmaker: “I keep forgetting that you’re still alive,” Musk tweeted in response. “Want me to sell more stock, Bernie? Just say the word . . . ”  Musk continued his Twitter replies to Sanders on Monday, tweeting “Ok, how much do you think is fair? Is 53% reasonable?”  He went on to add: “Probable capital allocation skill of heirs is lower than original creator, so I am in favor of an estate tax.” Musk has signed the Giving Pledge, a promise to donate at least half his fortune to charitable causes. Forbes estimates that so far Musk has donated less than 1% of his fortune. 

Musk remains the richest person in the world, according to Forbes’ estimates, $62.7 billion wealthier than second place Jeff Bezos, as of Monday’s market close.

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