Tesla shares with price slide: Elon Musk has to sell shares to pay taxes

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Twitter troll:

Elon Musk is tough on Senator Bernie Sanders - and at the same time heightened fears that he will soon be selling Tesla shares on a large scale

Photo: ODD ANDERSEN / AFP

Up and down with Elon Musk: The market value of the US electric car manufacturer Tesla fell well below the one trillion dollar mark on Monday. At times, the stock fell more than 5 percent and fell to $ 970 per share. Since its record high of 1230 US dollars in early November, the paper has already lost around 20 percent of its value. Tesla's market value almost doubled between July and November. But after the steep climb, Tesla boss Musk himself hardly misses an opportunity to push the course again - preferably through messages on his favorite medium, Twitter.

The background to the share sales are tax claims that the Tesla boss has to face. Musk is rewarded with stock options at Tesla. Having reached most of the milestones in his ambitious (and highly lucrative) compensation program, he has the right to purchase Tesla stock for less than $ 7 apiece, according to an analysis by US finance firm Halter Ferguson Financial (HFF). Specifically, he has

. The difference to the current stock exchange price of just under $ 1000 results in a double-digit arithmetic billion profit for Musk. Musk has to pay tax on this when exercising the options - i.e. when he exercises the option and not only when he actually sells the shares. According to CNN calculations, Musk could face a $ 10 billion tax claim.

The options must be exercised by August 2022, otherwise they will expire worthless.

Musk had stated in early 2021 that he would likely exercise the options from the 2012 premium "in the near future."

The Tesla boss is the richest person in the world because of the price explosion of Tesla shares with assets of currently around 280 billion dollars.

But he has to either sell stocks or borrow money to pay his tax debts.

A simple tax thing - and endless theater via Twitter

Musk wouldn't be Musk if he didn't make a big fuss out of this simple tax thing. The statement by various US politicians that it is actually a good idea for the richest person in the world to pay taxes is apparently an insult to majesty. On his favorite stage, Twitter, Musk had his followers vote publicly whether he should sell ten percent of his Tesla shares. A majority of 58 percent voted in favor, Musk then sold around 3 percent of his shares - but to reach 10 percent, he would have to sell another 17 million shares.

There are some indications that Musk will still sell Tesla shares on a large scale in the coming months - which should weigh on the share price. On the one hand, he needs money if he exercises his other stock options by August 2022 at the latest. And on the other hand, he proved again on Monday via Twitter that his reaction was more impulse-driven than rational.

To a tweet from the prominent US Senator

(80), Musk reacted in his usual crude and arrogant way. "We have to make sure that the richest pay their fair share of taxes," Sanders wrote. "I keep forgetting that you're still alive," Musk poisoned. And he added, "You want me to sell more shares, Bernie? Just say it." If a third-rate drunk street thug were looking for a fight, he would choose words similar to the Tesla boss.

With such statements, Musk should encourage other politicians to comment on the tax debt of the richest man in the world - and to increase the pressure to sell more shares. "Whether the richest man in the world should pay taxes or not should not depend on the result of a Twitter vote," Senator Ron Wyden from Oregon had already announced. "It's time for a billionaires income tax." The reaction of the stock exchange on Monday shows that many investors are now expecting the Tesla boss to sell more shares.

Musk should also know who he's messing with.

Sanders has been calling for taxation on the super-rich in the US for years, and with this demand has brought many young voters behind him.

As chairman of the Senate Budgets Committee, Sanders had campaigned for the richest 0.1 percent of the US population to be subject to an annual tax on their wealth.

Such a tax would bring in up to $ 4.4 trillion in ten years.

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• According to a Twitter poll: Elon Musk wants to sell a tenth of his Tesla shares

Even if the idea of ​​a tax on the wealthy fails to catch on in the US, Elon Musk's tax burden could increase significantly in the months and years to come. In addition to the federal taxes that become due when exercising his multi-billion dollar option programs, there are also income taxes. Although Musk recently moved from California to Texas to avoid these taxes, he says he still spends a lot of time in California and could therefore still be taxable there.

Tesla shareholders hope that Musk will find ways and means in the coming months to sell the promised 10 percent of his shares as gently as possible.

However, this requires a cautious, level-headed and patient strategy.

Qualities that are not necessarily the strengths of the Twitter boss.

la / reuters