Because the Tesla founder asked his followers whether to sell a tenth of his assets, equal to 210 billion dollars
A drop in the stock market of almost 5 percent, 60 billion dollars burned: the decline recorded by Tesla makes a sensation. But the extent of the phenomenon is not impressive, given that the value of Elon Musk’s car company rises (often) and falls (rarely) in an unpredictable way. And since the title came from a gallop, being grew by nearly 50 percent in the last month thanks to record profits and news like Hertz’s decision to buy and rent one hundred thousand Tesla cars.
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Also after the decline of these days the company, which still sells a few hundred thousand cars a year, vale pi di Ford, General Motors, Volkswagen, Bmw e Daimler-Mercedes put all together. To amaze the way in which the current situation has come about.
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For years, short sellers have infuriated Musk with their attempts to depress the stock’s value to make speculative gains. This time the founder played them causing the fall himself with the announcement dell’plans to sell 10 percent of Tesla shares owned by him: a total assets of 210 billion dollars. The decision, legitimate in itself, was badly taken by the market: an owner selling stock in his company doesn’t give a good signal.
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Musk justified himself with the need to cash in order to to pay taxes: I do not receive salaries, for me the only way to settle the accounts with the tax authorities is to sell securities. Only partially true. Meanwhile, Elon, like other rich people, has circumvented the tax rules by obtaining (tax-free) loans from banks to which he pledged shares of his company. Thus avoiding to sell them and to pay taxes on capital gains.
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Justifying himself in this way, Musk, after criticizing the Democrats for their goal of taxing even the unrealized gains of those who have seen the value of his shares explode, points out that he himself used (legally) the technique that allows you to procure resources through credit without paying anything to the IRS, the US Tax Authority. Some wealthy people use this system to finance their lifelong luxuries switching from one loan to another.
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Musk probably used the collected resources for finance its industrial projects and ambitions to conquer space. In the face of a possible sharp decline in Tesla’s values, banks could then ask him to sell shares to be sure of recovering their credits. Again: by next July the founder will have to exercise the options on 20 million Testa shares received in 2012 in lieu of remuneration. But in that moment he will have to pay taxes on the huge difference in value between the price of ten years ago and the current one.
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Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
— Elon Musk (@elonmusk) November 6, 2021
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in conclusion reasons to discreetly lighten its share package, Musk has them. But he decided to dramatize and spectacularize this step and, wanting to add a social touch, set up some kind of Twitter lottery. On Saturday the entrepreneur asked to his 66 million followers to vote: Do you think I have to sell 10 percent of my shares? Tell me what to do and I will do it. There majority of his fans (57 percent) voted in favor of the sale. But what sense does it make to rely on a popular opinion after having acquired the conviction of the financial need to see? Analysts said he would have sold anyway, even if the poll gave the opposite result. And the Wall Street Journal accuses him of having done so moves that are an insult to the intelligence of its shareholders.
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November 9, 2021 (change November 9, 2021 | 14:55)
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