Musk to sell $10bn in Tesla stock as Twitter poll is settled

Assuming he is a man of his word, Elon Musk is set to sell $10bn worth of shares in Tesla, following the conclusion of a poll he put to Twitter on Saturday.

After 24 hours of voting and around 3.5m votes, “yes” won by 57.8% to 42.2%.

What could this mean for the Tesla share price?

The sale of such magnitude will expectedly result in substantial downward pressure, which could become clear as of Monday.

A dive on Monday would come on the back of what has been an outstanding run from Tesla, which is up by 54% in the past month, sitting at $1,222 per share.

Perhaps, as cynics are suggesting, it was all part of a cunning plan by Musk, who could be seeking to ‘sell the top’ or minimize tax liabilities.

First, Musk has not been shy in the past to admit that he believes the Tesla share price is overvalued.

Jim Cramer, speaking on Squawk on the Street, echoed these sentiments: “Tesla is actually a phenomenon we have to talk about. I’ve actually never seen a stock go up endlessly on nothing.”

Therefore the poll could be smoke and mirrors for what Musk believes is an opportunity to ‘sell the top’.

Secondly, as Jericko Roman points out, Musk will have to pay taxes on options he must exercise by 2022. Selling a 10% stake could reduce the share price thereby minimising his tax bill.

Musk may be playing with fire in terms of the legality of his Tweets potentially influencing markets.

Especially as Tesla board member Kimbal Musk, also known as Elon’s brother, exercised options on 25,000 shares at $74.17 per share on Friday, according to an SEC filing.

On the other hand, for those who have been biding their time to invest in Tesla at a cut price, Christmas may be about to arrive ahead of schedule.