This isn’t the first time Elon Musk has made a splash on Twitter.
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Tesla stock was falling Monday as investors reacted to Elon Musk’s latest postings on Twitter, where signs pointed to the CEO of the electric-vehicle maker imminently selling 10% of his stake in the company.
Tesla (ticker: TSLA) was down 5.5% in premarket trading in the U.S., with the company’s Frankfurt-listed shares (TL0.Germany) down 6% after opening 9% lower.
Musk asked his 62.8 million Twitter followers this weekend if he should sell 10% of his Tesla stock, promising to abide by the results of the poll. Almost 58% of the more than 3.5 million respondents to the Twitter poll voted for him to sell.
The billionaire Tesla CEO is considered the world’s richest person by virtue of his holdings in the EV company, which has seen its share price soar 190% over the last year and some 3,100% over the past five years.
Plus: The Twitterverse Voted. Now Elon Musk Has to Sell.
Musk framed the Twitter poll in the context of a debate over whether the richest Americans were paying their fair share of taxes. Congress had considered taxing billionaires’ unrealized investment gains as a way to address the issue, but dropped the idea.
“The only way for me to pay taxes personally is to sell stock,” Musk said on Twitter, noting that he doesn’t receive a cash salary or bonus for his corporate roles, at Tesla as well as at aerospace company SpaceX.
Russ Mould, an analyst at broker AJ Bell, said Monday that the Twitter poll “effectively signals that he is going to dump stock on the market. In technical terms this is known as a share overhang, and it is something that would typically force the share price down.”
“He is so rich that he probably doesn’t care if his actions cause the Tesla price to fall a bit,” Mould added. “However, he also has a duty to act in shareholders’ interests which he hasn’t done in this situation because the incident has already destabilized the company’s valuation.”
But the analyst also noted that Tesla’s share price potentially hasn’t fallen as much as one might expect—and that could be because investors are taking Musk’s comments with a pinch of salt. The high-profile CEO has made bold statements on Twitter in the past which have later been reversed—like saying Tesla would take Bitcoin as payment, before backtracking on the plan.
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