Musk, the world’s richest person, tweeted on Saturday that he would offload 10% of his stock if users of the social media network approved the proposal.
The Twitter poll asking Musk’s followers if he should sell stock garnered more than 3.5 million votes, and 57.9% of people voted “Yes”.
Tesla’s shares listed in Frankfurt were down 7.9% at 980 euros at 0731 GMT. Its U.S.-listed shares are up 73.2% so far this year, compared with a 23.9% increase in the Nasdaq Composite index.
Musk had previously he would have to exercise a large number of stock options in the next three months, which would create a big tax bill. Selling some of his stock could free up funds to pay the taxes.
“I was prepared to accept either outcome,” Musk said, after the voting ended. Market participants expected speculators would try to front-run his selling.
As of June 30, Musk’s shareholding in Tesla came to about 170.5 million shares and selling 10% would amount to close to $21 billion based on Friday’s close, according to Reuters calculations.
Including stock options, Musk owns a 23% stake in Tesla, the world’s most valuable car company.
In the three months to Nov. 4, company insiders at Tesla sold $259.62 million worth of shares, excluding dispositions of indirectly held shares, according to Refinitiv Eikon data.
Musk’s straw poll follows a proposal by U.S. Senate Democrats to tax billionaires’ stocks and other tradeable assets to help finance President Joe Biden’s social spending agenda and fill a loophole that has allowed them to defer capital gains taxes indefinitely.
“The last thing you do when offloading a massive exposure is to reveal your hand,” said Chris Weston, head of research at broker Pepperstone in Melbourne.
“The buyers tend to step away when you have an overhang like this, but this is no ordinary story and is Musk’s way of getting back at the proposal to tax the elite with gains on unrealized profits.”
Tesla breached a trillion dollars in market capitalization late in October, becoming the fifth U.S. company to join a club which includes Apple, Microsoft, Amazon and Alphabet.
“I’d be looking for clients to flip to shorting fairly aggressively, although hold periods would be very short-term in nature,” Weston added.
