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Taxes and Loans: What's Really Behind Musk's Vote to Sell Stocks?

Tesla boss Elon Musk. (Photo: dpa)

At the weekend, Tesla boss Elon Musk asked his 62.5 million Twitter followers whether he was ten percent of his Tesla – Sell stocks or not. He, according to the richest person in the world, will stick to it in any case. The vote was clear: 57.9 percent of Twitter users who took part in the election voted in favor of selling the shares. The – foreseeable – consequence: The price of the Tesla share collapsed on Monday by nine percent. But now there are doubts about Elon Musk’s motivation – the survey just a pretext?

Sell stocks for tax counting?

Initially, observers were: inside assumed that Musk’s stock sale announcement in response to d he discussions about tax increases for the super-rich and his contribution to solving the world’s problems can be seen. Musk had made sure of that himself with his comments on Twitter. At the start of the survey, for example, he stated that recently a lot had been said about “unrealized profits as a means of tax avoidance”. Therefore, according to Musk, he is proposing to sell 10 percent of his Tesla shares. Since he does not receive any salaries or bonuses, he has to sell shares to pay taxes.

Meanwhile it seems that Musk should have sold a larger block of shares anyway. As CNBC writes, the Tesla boss is facing a huge back tax payment of $ 15 billion that has nothing to do with the announced sale of shares. The taxes are said to be due because Tesla and Musk made an agreement in 2012 that the electric car boss would be paid in stocks and options. According to CNBC, the term of many options ends in 2022. In order to redeem them and get the shares at the agreed price, according to the US TV broadcaster, Musk has to pay taxes on the profits.

Expiring options, loaned Tesla shares

According to calculations, Musk should be able to achieve around 28 billion dollars in returns – the around 54 percent in taxes would result in the payment of around 15 billion dollars. At the code conference in September, Musk had indicated a stock sale towards the end of the year. If he did not redeem the expiring options, they would expire, Musk said. In addition, according to CNBC, Musk is said to have borrowed part of his shares. That already affects 92 million shares. He also has to repay this money. Musk’s entire stake in Tesla is currently said to be worth around $ 200 billion.

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Derrick Santistevan
Derrick is the Researcher at World Weekly News. He tries to find the latest things going around in our world and share it with our readers.

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