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Simple math, why sell Tesla shares to Elon Musk

This weekend, Tesla’s CEO and billionaire asked his Twitter followers if he would sell 10% of his shares in Tesla, and they said yes. However, according to media reports, regardless of the rhetoric, he would soon have to sell his shares to Elon Musk anyway.

will face a tax liability of $ 1 billion due to stock options expiring next year, and this is probably the real reason why he considered selling 10% of his shares in Tesla at all.

As Musk himself stated, raise a salary or cash bonus from Tesla, so your taxable assets come from stock awards and gains on the company’s share price. Back in 2012, Musk received Tesla stock options that allow it to buy 22.86 million Tesla shares at a fixed price of just $ 6.24 per share. As the company’s stock closed at $ 1,222.09 a week last week, its profits from these options are now just under $ 28 billion.

Musk’s stock options expire in August 2022, but to use them, you must pay a combined income tax of 54.1% on your profits. According to experts, the tax rate at the current exchange rate is about $ 15 billion

Musk himself indicated that he would start selling the Tesla shares, saying, “So … I’m going to sell a huge block of options – because they will have to, or they will expire. “

The Twitter community was divided over Musk’s poll. While some were annoyed that their stake in Tesla would decline when Musk began selling, others say it’s time for the billionaire to pay the amount due to him. for billionaires to tax their profits when their shares rise if they do not sell their shares

Many have suggested that the fate of billionaire taxes should not be decided by a Twitter vote Ron Wyden Senator Oregon tweeted: “Whether the richest man in the world pays tax at all should not depend on the outcome of a Twitter poll. It’s time for a billionaire income tax. ” his economist tweeted that “he can’t wait for the day when the world’s richest man’s tax-paying activity doesn’t depend on a Twitter poll.” by clicking here!

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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