Tesla shares were under pressure on Monday after millions of Twitter users polled by chief executive Elon Musk concluded that he should sell 10 per cent of his stake in the electric carmaker.
The 24-hour poll, which was conducted over the weekend, is the latest stunt by Musk to delight fans but risk controversy. When announcing the poll on Saturday, Musk said on Twitter that he would abide by its result.
The Tesla chief’s decision to throw open to the Twittersphere whether to sell more than $20bn of shares comes as the question of how to tax billionaires has gained some political traction in the US.
By early on Monday in New York, Musk, who boasts 62.7m Twitter followers, had yet to respond to the result of a poll in which 58 per cent of the 3.5m who voted said the entrepreneur should sell the stake.
Shares in Tesla, which have surged almost 70 per cent this year, catapulting the group’s value beyond $1tn, were down 5 per cent in early trading in New York.
The online poll divided opinion. Some heralded the potential benefits if Musk does sell, while others speculated that the 50-year-old, whose Twitter following dwarfs that of other business leaders, was simply seeking backing for a sale he may have wanted to make anyway.
“On the surface, this is great news, you get more liquidity and a billionaire paying tax,” said Philippe Houchois, an automotive analyst at Jefferies, who believes Musk will follow through on his promise to sell.
It “would be damaging to [Musk’s] image if he didn’t” go on to sell the shares, Houchois added.
Musk flagged at a conference in September that he was likely to sell shares in the fourth quarter as he has options that expire early next year.
If he goes ahead, the vote will cause a huge block of Tesla shares to hit the market. Based on Friday’s closing price, Musk’s 17 per cent stake in Tesla was worth $208bn. He did not indicate when or how he would dispose of the stock.
The meteoric rise in Tesla’s shares has made Musk billions of dollars through a controversial compensation package agreed three years ago, under which he has been able to exercise large tranches of stock options when the carmaker meets certain performance targets and its shares hit pre-determined levels.
The Tesla chief earlier this month also said he was open to selling $6bn of shares and donating the proceeds to the World Food Programme but only if the organisation told him how it would use the money to end poverty.
His use of Twitter has marked Musk, who at present styles himself as “Lorde Edge” on the platform, out from other business executives but also drawn scrutiny from regulators, notably over a 2018 tweet that he had the “funding secured” to take the company private.
In 2019, Musk agreed to a deal with the US Securities and Exchange Commission over new restrictions on his use of social media.
Houchois of Jefferies reckoned that Musk would “keep pushing the boundaries” on social media as “nothing has really blown up in his face so far”.
With reporting by Richard Waters in San Francisco