Electric car manufacturer Tesla’s Frankfurt-listed shares have fallen by around 9 per cent in early trading on Monday, following CEO Elon Musk’s proposed sale of approximately 10 per cent of his stake.
World’s richest person Musk tweeted on Saturday that he would offload 10 per cent of his stock if users of the social media network approved the proposal.
Musk’s Twitter poll asked his followers if he should sell stock garnered more than 3.5 million votes, and 57.9 per cent of people voted ‘Yes;.
While Tesla’s shares are mainly traded on the US Nasdaq index, the company has a dual listing with a presence on the German stock market too.
Tesla CEO Elon Musk’s tweets have once again seen share nosedive
Tesla’s shares listed in Frankfurt were down 7.9 per cent at 980 euros at 7.30am GMT.
Its US-listed shares are up 73.2 per cent so far this year, compared with a 23.9 per cent increase in the Nasdaq Composite index.
Musk had previously said he would have to exercise a large number of stock options in the next three months, which would create a large tax bill, and selling some of his stock could free up funds to pay the taxes.
‘I was prepared to accept either outcome,’ Musk said.
As of 30 June, Musk’s shareholding in Tesla came to about 170.5 million shares and selling 10 per cent would amount to close to $21billion based on Friday’s close, according to Reuters calculations.
Including stock options, Musk owns a 23 per cent stake in Tesla, the world’s most valuable car company.
It is the second time this month a Musk tweet has impacted Tesla’s share price, with the billionaire having caused a sell-off last week when he said it had not signed a contract with Hertz.
Musk says he will follow through on the results of the poll
Musk’s Twitter account has been the source of several sharp Tesla share price movements in recent years.
In the three months to 4 November, company insiders at Tesla sold $259.62million worth of shares, excluding dispositions of indirectly held shares, according to Refinitiv Eikon data.
Musk’s twitter poll follows a proposal by US Senate Democrats to tax billionaires’ stocks and other tradeable assets to help finance President Joe Biden’s social spending agenda and close a loophole that has allowed them to defer capital gains taxes indefinitely.
Tesla breached a trillion dollars in market capitalisation late in October, becoming the fifth US company to join a club which includes Apple, Microsoft, Amazon and Alphabet.
