People are crediting a Twitter poll with Elon Musk’s decision to sell more than $5 billion worth of Tesla stock this week. But was it just a publicity stunt?
On Saturday, the world’s richest man did a Twitter poll about whether he should sell 10% of his Tesla stock.
“I will abide by the results of this poll, whichever way it goes,” Musk vowed.
Nearly 60% of 3.5 million who voted in the poll favored Musk selling the shares.
On Thursday, news broke that Musk had sold millions of his shares.
Now some are crediting the poll with his decision to divest roughly 3% of his Tesla stock.
The truth is a bit murkier. As Forbes reports, footnotes in the filing indicate that Musk sold the shares in part to pay his tax bill. That’s because Musk has more than $90 billion in unrealized stock options that allow him to buy shares at a significant discount. A set of those options worth more than $20 billion expires in August, so he has to buy the stock by then to pay the discounted rate.
Those options come with a hefty tax bill of up to $10 billion, per Forbes.
Tesla’s prices dropped significantly following Musk’s Twitter poll.
On Monday, Forbes notes, Musk exercised a stock option to purchase nearly 2.2 million shares—worth roughly $2.2 billion. He paid a discounted rate of $13.4 million. He then sold nearly 1 million stocks for $1.1 billion later that day. The following two days, he sold an additional 3.6 million shares.
The poll may have saved Musk money.
“Thanks to the decline in Tesla’s share price Monday, the CEO’s tax bill is likely to be lower than it would have been if he had exercised his options before the poll,” the Wall Street Journal reports.
Further, according to Journal, Musk bought and sold Monday’s batches of shares as part of a preset trading plan made in September. The New York Times notes that the filings also state he sold 1 million of the shares “solely” to cover the taxes on the 2.2 million shares.
So Musk was going to sell a bunch of stock anyway. And he could’ve paid his taxes another way, but selling millions of shares was an easy way to get ahead of the debt.
Nevertheless, many headlines are simply running with the “Musk sells stock after Twitter tells him to” angle.
Twitter users aren’t having it. “He has taxes coming due. The Twitter stunt was just that—a stunt,” one tweeted.
Musk may have also put his finger on the scale to influence the results of the poll.
“Note, I do not take a cash salary or bonus from anywhere,” Musk added in a tweet below the poll. “I only have stock, thus the only way for me to pay taxes personally is to sell stock.”