SAN FRANCISCO (REUTERS) - Tesla Inc CEO Elon Musk should sell about 10 per cent of his Tesla stock, according to 57.9 per cent of people who voted on his Twitter poll asking users of the social media network whether he should offload the stake.
"I was prepared to accept either outcome," Musk said, after the voting ended.
The world's richest person tweeted on Saturday (Nov 6) that he would offload 10 per cent of his stock if users approved the proposal.
Musk has previously said he would have to exercise a large number of stock options in the next three months, which would create a big tax bill. Selling some of his stock could free up funds to pay the taxes.
As of June 30, Musk's shareholding in Tesla came to about 170.5 million shares and selling 10 per cent would amount to close to US$21 billion (S$28.36 billion) based on Friday's closing, according to Reuters calculations.
The poll garnered more than 3.5 million votes.
"Much is made lately of unrealised gains being a means of tax avoidance, so I propose selling 10 per cent of my Tesla stock," Musk said on Saturday, adding that he does not take cash salary or bonus "from anywhere", and only has stock.
US Senate Democrats have unveiled a proposal to tax billionaires' stocks and other tradeable assets to help finance President Joe Biden's social spending agenda and fill a loophole that has allowed them to defer capital gains taxes indefinitely.
Musk has criticised the proposal saying, "Eventually, they run out of other people's money and then they come for you."
Senate Finance Committee Chairman Ron Wyden, who floated the tax proposal, said on Saturday: "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."
Including stock options, Musk owns a 23 per cent stake in Tesla, the world's most valuable car company whose market value recently exceeded US$1 trillion. He also owns other valuable companies including Space X.
His brother Kimbal Musk on Friday sold 88,500 Tesla shares, becoming the latest board member to offload a large number of Tesla stocks which hit record highs.
A week ago, Musk said on Twitter that he would sell US$6 billion in Tesla stock and donate it to the United Nations' World Food Programme (WFP), provided the organisation disclosed more information about how it spent its money.
Tesla bull Gary Black, portfolio manager at The Future Fund, said that Musk's potential stock sale would lead to "1-2 days of modest selling pressure," but said there would be solid institutional demand to snap up the shares at a discount.
Musk has said he did not want to borrow against stock to pay taxes because stock value could go down.
He has an option to buy 22.86 million shares at US$6.24 each, which expires on Aug 13 next year, according to a Tesla filing.
The option exercise could lead to gains of roughly $28 billion based on Tesla's Friday closing price of US$1,222.09.
In September, Musk said he is likely to pay taxes of over half the gains he would make from exercising options.
Last year, he said he has been relocated from California to Texas which should lead to a cut to the total tax bill because Texas has no income tax, experts say
"(It) seems crazy to borrow that much to pay taxes, so I have to assume he'd need to liquidate a substantial amount of the shares purchased from the option exercise to pay taxes," said Bryan Springmeyer, an attorney at San Francisco-based law firm Springmeyer Law.
