More than $60 billion is set to be wiped off Tesla’s $1,227 billion market cap when US markets open this afternoon after chief executive Elon Musk said he planned to sell 10% of his stake in the business he founded.
Over the weekend the flamboyant and often controversial Musk asked his near 63 million Twitter followers whether to sell 10% of his stock.
From more than 3.5 million voters the majority backed the stake sale pledge despite worries that the move would hurt the share price. 
Tesla shares are set to fall by more than 5% by pre-market data, with predictions indicating that the stock will decline by around $64 to $1,157 when New York markets open later today.
MONSTER TAX BILL
Last month, Musk slammed a Democratic proposal to tax billionaires’ annual unrealized capital gains, saying, ‘eventually, they run out of other people’s money and then they come for you.’ Musk is believed to have needed to sell millions of shares this quarter due to a looming $15 billion tax bill on Tesla options awarded in 2012 as part of a compensation plan.
Musk has a long and checked history of commenting on Tesla shares, often courting controversy, and his latest unusual behaviour has put critics on alert.
‘Why not just start selling some tranches, without the fanfare and attention-seeking,’ pondered Neil Wilson on Monday, chief analyst at Markets.com.
CASH OUT, BUT WHY THE SHOWBIZ
‘You could say he just wants to sell some stock now because the valuation has rocketed lately, cash out while the going is good,’ said Wilson. The analyst accepted that it is ‘hard to criticise someone for doing that’ and since Musk takes no salary or bonus from being Tesla boss, selling shares was one of the few options Musk had to cover taxes.
‘But does it need all the fintwit showbusiness,’ asked Wilson rhetorically. ‘Hard to say it’s manipulation, but it’s not normal.’
Musk does have plenty of supporters, though. ‘It’s extremely rare to have a founder with so much of their worth in their public company,’ said Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management. ‘Many like Zuck (Mark Zuckerberg) and (Jeff) Bezos have been extracting billions in cash for years from stock sales,’ said Gerber of the Facebook (now called Meta) and Amazon founders.
