Musk Tweet Sends Tesla Down 5% In Pre-Market Trading

Musk Tweet Sends Tesla Down 5% In Pre-Market Trading
Andrew Rummer

over 2 years ago1 min

Mentioned in story

Tesla fell on Monday after CEO Elon Musk proposed selling 10% of his shares in a Twitter poll

Tesla shares declined nearly 5% to $1,170 as of 7:30am New York time on Monday. The stock hit a record of $1,229 last Thursday, valuing the maker of electric vehicles at more than $1.2 trillion.

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Musk wrote on Twitter on Saturday. “I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.”

Some 3.5 million people voted in the Twitter poll – more than turned out for last week’s Virginia gubernatorial election – and 58% said Musk should sell. 

Tesla trades at more than 150x projected profits, so is vulnerable to pull-backs on unexpected news. Yet investors may be overreacting to this potential sale.

While Musk is Tesla’s biggest single shareholder, with about 170 million shares, selling a tenth of his holdings would represent less than 2% of the automaker’s total shares. And with an average of 31 million Tesla shares changing hands each day, there’s certainly enough liquidity in the market to absorb the sale of 17 million shares. 

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