Tesla’s big stock slide is continuing in the wake of CEO Elon Musk’s recent Twitter poll on whether he should sell 10% of his holdings to pay more taxes (yes he should, his followers advised).
The electric-car maker’s shares were down 1.4% at the start of trading Wednesday, with the drop quickly deepening to 3% before recovering somewhat. That came after a horrendous Tuesday, in which they lost 12% of their value, following a 4.8% drop on Monday. The now barely trillion-dollar company is down more than $200 billion over that span—though it’s still up 156% over the past year.
Musk said he would abide by his Twitter followers’ recommendation for a share sale. However, there is as yet no public record of him informing the Securities and Exchange Commission (SEC) about a potential sale. Musk’s brother, Kimbal, sold $109 million worth of his Tesla stock just before the CEO’s Twitter poll, records show.
As part of a 2019 settlement between Musk and the agency—struck to end a securities-fraud probe—he promised to have a Tesla lawyer preapprove his market-moving public statements. Earlier this year, the SEC admonished Musk over a tweet saying “Tesla’s stock price is too high imo,” but his lawyers reportedly retorted that the agreement doesn’t cover statements about the firm’s share price.
Musk’s personal wealth has taken a significant hit this week, dropping around 15% to $288 billion (though again, Tesla’s otherwise stellar stock-price performance over the past 12 months has still boosted Musk’s fortune by around 70%).
The Big Short investor Michael Burry theorized this week that Musk needed to sell the shares to pay back personal loans, for which a sizable chunk of his Tesla shares serve as collateral. Another possible reason he needs the cash: a 10-year window on cheap share options is about to close.
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