Sunday, 5 December, 2021
E-paper

Tesla shares slide

NEW YORK: Tesla declined after Elon Musk’s Twitter followers voted in favour of selling 10 per cent of his stake in a poll set up by the electric car chief.

A majority of 3.5 million Twitter users – 58 per cent –said they’d support such a sale in a Twitter poll that Mr Musk ran during the weekend. The stake would be val-ued at about $21 billion based on 170.5 million Tesla shares he holds, report agencies.

“I was prepared to accept either outcome,” Mr Musk said in a tweet after the poll closed.

Tesla fell as much as 7.2 per cent in pre-market trad-ing compared with Friday’s close of $1,222 in New York, tracking an earlier indication from Germany’s Trade-gate.

The crowd-sourcing exercise is the latest example of Mr Musk’s long history of using Twitter and his legions of fans on the platform to stoke interest in his company, sometimes pushing the envelope with tongue-in-cheek tweets.

The world’s richest person proposed the move in a tweet citing recent discussions about the ultra-wealthy hoarding unrealised gains to avoid paying taxes. Mr Musk doesn’t take a salary, but has to pay taxes on any stock options that he exercises.

Mr Musk’s tweets have moved Tesla shares in the past, sometimes drawing the ire of authorities. MrMusk in 2018 agreed to get approval from a Tesla attorney pri-or to communicating material information to investors as part of a settlement with US securities regulators. It wasn’t clear whether that official previewed Mr Musk’s Twitter poll.

While large sales by insiders are often seen as a nega-tive signal, a sale of this size won’t alter Tesla’s story in a meaningful way, said Dan Ives, an analyst at Wedbush Securities. Demand remains high for Tesla shares among both institutional and retail investors, he said. The unorthodox step of getting buy-in from fans and in-vestors via a poll may also ease any concerns.

“Selling 10 per cent is probably going to add 1.5 per cent to 2 per cent to the float, so it doesn’t really signifi-cantly move the needle,” Mr Ives said.