They are a ticking tax bomb."
Tax Bomb
Elon Musk, Tesla CEO, made a surprising splash this weekend by announcing that he would decide whether to sell $21 billion worth of Tesla stock. This decision was based on results from a Twitter poll. The majority of those who voted for him to sell ended up voting for him to do so.
Musk claimed that he was selling stock to "pay taxes personal," but many were still puzzled by his decision. It turns out, the mercurial billionaire may have other selfish motives. According to The New York Times, Musk must pay some significant taxes on his stock if he does not sell it. This means that Musk has given his fate to a social media mob right now.
Brian Foley, an executive compensation consultant told the NYT that they are "a ticking time bomb" in terms of tax. "Offhand, I can't see any way for him not to pay the tax."
One Strange One
Musk was granted nearly 23 million stock options in 2012. The shares will expire next year. Due to the way that the options were designed, Musk could have to pay taxes of up to $10 billion.
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He seems to have intended to sell the shares and use the Twitter poll to cover his plans to avoid paying the huge taxes on the options. His pledge to sell 10% of the stock would mean that he would be able to sell $20 billion worth shares at current price -- twice the tax bill.
It's still quite a confounding move by SpaceX founder, who is not a stranger to making bizarre moves. He's been a bit sexist in recent weeks, starting a row with UN's World Food Program Director. He might now be putting ungodly amounts of money at stake due to a Twitter poll and also lowering Tesla's valuation.
"Musk was expected to sell some of Tesla stock before the year ended, but no one imagined that a Twitter poll would translate into a 10% sale of his ownership," Daniel Ives (an analyst at Wedbush Securities) told the NYT. "This weekend's tweet poll was strange even for Elon."
READ MORE: Is Elon Musk's Twitter poll a sign of a tax bill [The New York Times]
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More Musk: Elon Musk Lets a Twitter Poll Decide If He Sells Tesla Stocks for $21 Billion
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