Elon Musk’s latest tweet sends Tesla stock into tailspin

Musk proposed the sale of 10% of his Tesla shares to his 63.2 million Twitter followers last Saturday.

FILE PHOTO - SpaceX owner and Tesla CEO Elon Musk speaks at the E3 gaming convention in Los Angeles, California, U.S., June 13, 2019 (photo credit: REUTERS/MIKE BLAKE/FILE PICTURE)
FILE PHOTO - SpaceX owner and Tesla CEO Elon Musk speaks at the E3 gaming convention in Los Angeles, California, U.S., June 13, 2019
(photo credit: REUTERS/MIKE BLAKE/FILE PICTURE)

Tesla’s eccentric billionaire founder Elon Musk is under fire for his latest controversial tweets this weekend, where he polled his followers about whether or not he should sell 10% of his stake in electric vehicle company Tesla.

Citing criticism for paying low taxes, Musk proposed the sale of 10% of his Tesla shares to his 63.2 million Twitter followers, later following up the tweet explaining that because he does not take a salary, the only way for him to pay taxes is on capital gains – meaning he would need to sell stock.

The poll – sent in on Saturday, before stock markets open – sent the stock spiraling on Monday morning. Tesla’s stock price is down nearly 13% since the tweets, while in comparison the stock went up over 156% in the past year.

Last Saturday’s incident was not Musk’s first controversy regarding Twitter and the world of finance. In September 2018, the US Securities and Exchange Commission (SEC) fined Musk and his company Tesla $20 million each for his tweet that funding had been secured to buy out shares and take Tesla off publicly-traded markets that August. In May 2020, shares dropped as much as 12% in one day after Musk tweeted that the company’s share price is “too high imo.”

Reports on Monday also indicated that Tesla board member Kimbal Musk, who is Elon’s younger brother, sold $110 million in Tesla stock on Friday – a day before Elon’s questionable tweets. It is unclear if the SEC will pursue charges or damages against Musk and Tesla.

A $15 billion tax bill on his over $28 billion in personal share gains looms for Musk, a possible reason he would look to sell shares, according to CNBC. Musk also owns solar power systems provider SolarCity, neurotechnology and AI-based startup NeuraLink, and tunnel construction company The Boring Company.

 Vice President Mike Pence and Mrs. Karen Pence arrive at Neil Armstrong Operations and Checkout Facility in Merritt Island, Fla. Wednesday, May 27, 2020, and are greeted by Jim Bridenstine, NASA Administrator. Elon Musk, Founder and CEO. (Official White House Photo by D. Myles Cullen) (credit: VIA WIKIMEDIA COMMONS) Vice President Mike Pence and Mrs. Karen Pence arrive at Neil Armstrong Operations and Checkout Facility in Merritt Island, Fla. Wednesday, May 27, 2020, and are greeted by Jim Bridenstine, NASA Administrator. Elon Musk, Founder and CEO. (Official White House Photo by D. Myles Cullen) (credit: VIA WIKIMEDIA COMMONS)

Musk’s latest antics drew the ire of Sen. Ron Wyden (D-Oregon), who replied in a tweet that, “Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the Billionaires Income Tax [sic].” Musk replied directly to Wyden with a crude tweet directed at the appearance of his Twitter account’s main photo.

The results of the poll were roughly 58% saying “yes” (meaning sell) and 42% saying “no.” Musk eventually sold about $5 billion in shares on Wednesday – roughly 3% of his Tesla holdings – according to SEC filings.