Lauren Moye, FISM News
Tesla Founder and the world’s richest man, Elon Musk, created a buzz by selling nearly $7 billion worth of his company’s shares this week, with even more to come if he intends to fulfill a promise to his Twitter followers.
The sales come after an eleven-week increase in value, including an October surge in stock price that placed Tesla up 46% from the start of the year. So far Musk has sold around 6.35 million shares for around $6.9 billion. However, this is only 37% of his commitment to sell one-tenth of his Tesla shares. This means he has roughly $10 million more to go if he plans on following through on a commitment to abide by a poll he posted on Nov. 6.
Musk tweeted last Saturday, “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.”
He added a public poll so that Twitter users could weigh in on his decision, promising “to abide by the results of the poll” no matter what the public decided. After more than 3.5 million votes, the final results showed 57.9% of respondents were in favor of the billionaire cashing out a 10% portion of his stock.
Musk asked respondents to keep in mind that he does not take a salary or cash bonus from his companies. Because most of his $270 billion fortune is tied up in stocks, he only pays taxes by selling them.
An economist for several websites responded to the Tweet in favor of selling stocks, but not with the goal to pay taxes because “the public would be better served” by Musk reinvesting his money rather than letting the government control it:
From a diversification and valuation perspective the sale makes a lot of sense. The fact that you'll have to pay taxes on the proceeds however is not a net benefit to society. The public would be better served by you wisely investing that money rather than government wasting it.
— Peter Schiff (@PeterSchiff) November 7, 2021
This is the largest sale of Tesla stock that Musk has participated in since he founded the electric car company in 2003. Before this, Musk held around 23% of stakes in the company.
The sales come after Musk received recent national attention for responding to a challenge to donate $6 billion to end world hunger. Musk tweeted on Oct. 31, he would “sell Tesla stock right now” and donate the proceeds to the United Nation’s World Food Programme if they could describe exactly how the money would help end world hunger.
WFP Director David Beasley said in an interview that they could “put forward a plan that was clear” enough to answer Musk’s concerns about how the money would be spent. Nothing publicly has come from the public exchanges between Beasley and Musk. It is unknown if any official plans were made.
Regardless, the increase in the billionaire’s cash reserve from these sales has the attention of organizations. The CEO of Rockefeller Philanthropy Advisors Melissa Berman said in an interview, “His opportunity to have great impact is to donate very significant sums of money to leading organizations that are dealing with the most pressing problems with global poverty and access to healthcare.”
In January, Musk also asked Twitter for “ways to donate money that really make a difference,” which signals that he has been putting thought into how his fortune can be put to use. It’s been noted by Forbes that Musk has so far only donated 1% of his net wealth. However, he was a 2012 signature on the Giving Pledge, which means he has committed to donating 50% of his wealth either in his lifetime or upon his death.