Tesla CEO Elon Musk has more than 170,000,000 shares of the company. Maja Hitij/Getty Images
Tesla stock dropped as high as 7% premarket after Elon Musk sold $21 billion worth of shares.
On Saturday, Tesla CEO Stephen Tesla asked his followers on Twitter if they would sell 10% of their stake. They said yes.
Musk previously suggested that Tesla stock could be sold this year for tax reasons.
Tesla plunged as high as 7% Monday in premarket trading after Elon Musk, CEO of Tesla, proposed selling 10% of his huge stake in the company's shares.
Musk asked his Twitter followers of 63 million whether they should sell 10% Tesla stock on Saturday. They said yes. Musk added, "I will follow the results of this survey, regardless of how it turns out."
Tesla stock dropped as much as 7.7% on Monday morning, but it has since recovered some of its losses. At 4.47 AM, it was down 5.65% to $1.153.03 ET.
Musk is Tesla's CEO since 2008. He owns 170.5 millions shares of the company. A 10% stake would therefore be worth approximately $21 billion.
He previously stated that he planned to sell stock by the end of this year. In September, he stated to the Code conference that a large block of options would sell in Q4 because he must or they will expire.
According to CNBC calculations, Musk could face a tax bill of around $15 billion for his stock options. These were awarded in 2012, and have since appreciated in value. Musk has also used his shares as collateral to obtain personal loans.
Continue reading: Elon Musk fired 11 Tesla engineers to start startups that will transform the auto industry.
Tesla's boss said on Saturday that he does not accept any cash bonus or salary. Since I have only stock, the only way to pay taxes is to actually sell it.
Tesla shares have shot up in 2020 and 2021, as investors who have been flooded with cash by central banks stimulus and government grants have placed a bet that Tesla will be the leader of the green revolution in transportation.
The stock has risen more than 50% in the past month thanks to strong third-quarter earnings, and Hertz's announcement about its purchase of 100,000 Teslas from the rental car company.
Musk has risen to the top of the global richest list due to the dramatic rise in Tesla stock prices. According to Bloomberg Billionaires Index, Musk is now worth $338Billion and his wealth has increased by $169B over the past year. With $202 billion in wealth, Jeff Bezos, Amazon founder, is second.
