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Twitter Has Spoken: Musk Should Sell $21 Billion Tesla Stake

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(Bloomberg) — Elon Musk’s social media followers have spoken: The Tesla Inc. chief should sell 10% of his stake in the electric-car maker.

A majority of 3.5 million Twitter users — 58% — said they’d support such a sale in a Twitter poll that Musk launched Saturday and closed shortly after 2:15 p.m. Sunday in New York. The stake would be valued at about $21 billion based on 170.5 million Tesla shares he holds.

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

A cryptocurrency version of Tesla’s shares trading on FTX suggests Musk’s tweeting may cause the shares to fall when Wall Street wakes up Monday. They were fetching $1,137.60 as of about 5:20 p.m. Sunday in New York, 6.9% lower than Friday’s close for the real stock.

The crowd-sourcing exercise is the latest example of 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 unrealized gains to avoid paying taxes. Musk doesn’t take a salary, but has to pay taxes on any stock options that he exercises.

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

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Signaling Intentions

While large sales by insiders are often seen as a negative 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 investors via a poll may also ease any concerns.

“Selling 10% is probably going to add 1.5% to 2% to the float, so it doesn’t really significantly move the needle,” Ives said in a phone interview. “I do believe that him doing it in this way definitely would soften the blow and would help the perception as well.”

The automaker’s stock has soared 73% this year to $1,222.09 as of Nov. 5, giving it a valuation of $1.2 trillion. The number of shares that Musk — its chief executive officer and largest shareholder — could be set to offload is equivalent to 80% of Tesla’s average daily trading volume in the past three months. The amount of stock he may potentially sell would be even greater if his options are included.

Tesla’s stock won’t officially begin trading again until the early morning hours of Monday in the U.S.

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Personal Fortune

Musk’s fortune stands at $338 billion, according to the Bloomberg Billionaires Index. About one-quarter of that consists of Tesla stock options that he’s free to exercise at any time. The securities come from two big awards he received in 2012 and 2018. The older contracts expire in August next year.

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If he exercised all of the options now and immediately sold the shares, they would net him $95.9 billion before taxes.

Musk may be signaling that he wants liquidity beyond the cash he’s secured by borrowing against his holdings in the EV maker. Last week he suggested he’d sell some stock if the UN could prove $6 billion could help alleviate world hunger. For years, Musk has said he would be the last to ever sell stock, and has often added to his position when Tesla has raised money from Wall Street so that his stake is not diluted.

Tax Situation

Musk moved to Texas, which has no state personal income tax, in late 2020. But as Tesla’s market value has skyrocketed and his personal wealth has ballooned, Musk has become a symbol of rising inequality — something he appears to be sensitive to. He was among the billionaires mentioned in a Pro Publica investigation of how the ultra rich avoid paying taxes, and has become a target of members of Congress who are pushing a billionaires tax.

“Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll,” U.S. Senator Ron Wyden, an Oregon Democrat, wrote in a tweet Saturday. “It’s time for the Billionaires Income Tax.”

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On his way to becoming the world’s richest person, Musk has made millionaires — and even at least one billionaire — among some of his fans, employees and other investors. Among them is Leo KoGuan, a Singapore-based retail investor and business owner who used his already considerable wealth to amass more than $7 billion in Tesla shares.

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Count KoGuan among those Twitter followers who say it’s time for Musk to take some money out of the automaker, even if it is just to use it in Musk’s other ventures exploring space and neural networks. “Politically and from tax point of view and given that Elon is poor in cash, he has no choice but to sell his stakes to pay tax and to be cash-rich,” KoGuan posted on Nov. 6.

(Updates crypto trading in fourth paragraph and adds reference to regulatory agreement in sixth)

First seen at Bloomberg

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TWITTER

Elon Musk Says He’ll Pay $11 Billion in Taxes in 2021 But Twitter Wants ‘Proof’

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Elon Musk took to Twitter to clarify once and for all that he will be paying a whopping $11 billion as taxes this year.

If the number of times Elon Musk could count when someone has asked him to pay the full taxes, he would be a very rich..wait, never mind. The Tesla boss is rich beyond any private individual has been in history, reports said.

Musk has increasingly been facing criticism from many politicians and many others who insist he has not been paying taxes as compared to the profits his companies have been making. On Sunday, the SpaceX CEO took to Twitter to share that he will be paying a whopping $11 billion as taxes.

For those wondering, I will pay over $11 billion in taxes this year— Elon Musk (@elonmusk) December 20, 2021

But some of the questions did not stop. One person tweeted how they needed to see Musk’s tax returns while yet another asked how much percentage was that of his total income.

A few were, however scathing of the government who thought they will add that amount to their pockets rather than using it for some proper development.

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Wow that’s enough to give each person in the world almost $2 million but instead the government will just stick it in their pockets— greg (@greg16676935420) December 20, 2021

Why not $200 billion? Asking for a Senator— litquidity (@litcapital) December 20, 2021

Earlier this week, Democratic US Senator Elizabeth Warren has tweeted to say that Musk should pay taxes and stop “freeloading off everyone else” after Time magazine named him its “person of the year”.

In response, Musk shot four tweets in which he said that the senator reminded him of a friend’s angry mom who yelled at everybody. He tweeted, ““And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year.” “Don’t spend it all at once … oh wait you did already.”

He added further, “You remind me of when I was a kid and my friend’s angry Mom would just randomly yell at everyone for no reason.”

Musk responded by saying that he “will pay more taxes than any American in history this year”. This Twitter exchange left netizens divided as even though many supported Warren and agreed that Musk should pay more taxes, others felt that he was already doing enough.

Musk’s Tesla is worth about $1 trillion. Over the last few weeks, he has sold nearly $14 billion worth of Tesla shares.

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The Tesla boss has been pushing for his colonize Mars agenda for years now, and has made it very clear in some occasions that he would rather spend the money on putting humanity on the red planet, than pay his taxes. “My plan,” the SpaceX founder tweeted about his fortune, “is to use the money to get humanity to Mars and preserve the light of consciousness.”

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Twitter Admits Policy ‘Errors’ After Far-Right Abuse Its New Rules of Posting Pictures

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Twitter’s new picture permission policy was aimed at combating online abuse, but US activists and researchers said Friday that far-right backers have employed it to protect themselves from scrutiny and to harass opponents.

Even the social network admitted the rollout of the rules, which say anyone can ask Twitter to take down images of themselves posted without their consent, was marred by malicious reports and its teams’ own errors.

It was just the kind of trouble anti-racism advocates worried was coming after the policy was announced this week.

Their concerns were quickly validated, with anti-extremism researcher Kristofer Goldsmith tweeting a screenshot of a far-right call-to-action circulating on Telegram: “Due to the new privacy policy at Twitter, things now unexpectedly work more in our favor.”

“Anyone with a Twitter account should be reporting doxxing posts from the following accounts,” the message said, with a list of dozens of Twitter handles.

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Gwen Snyder, an organizer and researcher in Philadelphia, said her account was blocked this week after a report to Twitter about a series of 2019 photos she said showed a local political candidate at a march organized by extreme-right group Proud Boys.

Rather than go through an appeal with Twitter she opted to delete the images and alert others to what was happening.

“Twitter moving to eliminate (my) work from their platform is incredibly dangerous and is going to enable and embolden fascists,” she told AFP.

In announcing the privacy policy on Tuesday, Twitter noted that “sharing personal media, such as images or videos, can potentially violate a person’s privacy, and may lead to emotional or physical harm.”

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But the rules don’t apply to “public figures or individuals when media and accompanying Tweets are shared in the public interest or add value to public discourse.”

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By Friday, Twitter noted the roll out had been rough: “We became aware of a significant amount of coordinated and malicious reports, and unfortunately, our enforcement teams made several errors.”

“We’ve corrected those errors and are undergoing an internal review to make certain that this policy is used as intended,” the firm added.

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Jack Dorsey Post Twitter Is Chasing His Crypto, Fintech Dream

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At a packed Miami conference in June, Jack Dorsey, mused in front of thousands of attendees about where his real passion lay: “If I weren’t at Square or Twitter, I’d be working on Bitcoin.”

On Monday, Dorsey made good on one part of that, announcing he would leave Twitter for the second time, handing the CEO position to a 10-year veteran at the firm. The 45-year-old entrepreneur, who is often described as an enigma with varied interests from meditation to yoga to fashion design, plans to pursue his passion which include focusing on running Square and doing more philanthropic work, according to a source familiar with his plan.

Well before the surprise news, Dorsey had laid the groundwork for his next chapter, seeding both companies with cryptocurrency-related projects.

Underlying Dorsey’s broader vision is the principle of “decentralisation,” or the idea that technology and finance should not be concentrated among a handful of gatekeepers, as it is now, but should, instead, be steered by the hands of the many, either people or entities.

The concept has played out at Square, which has built a division devoted to working on projects and awarding grants with the aim of growing Bitcoin’s popularity globally. Bitcoin price in India stood at Rs. 44.52 lakh as of 12:50pm IST on December 1.

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Dorsey has been a longtime proponent of Bitcoin, and the appeal is that the cryptocurrency will allow for private and secure transactions with the value of Bitcoin unrelated to any government.

The idea has also underpinned new projects at Twitter, where Dorsey tapped a top lieutenant – and now the company’s new CEO Parag Agrawal – to oversee a team that is attempting to construct a decentralised social media protocol, which will allow different social platforms to connect with one another, similar to the way email providers operate.

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The project called Bluesky will aim to allow users control over the types of content they see online, removing the “burden” on companies like Twitter to enforce a global policy to fight abuse or misleading information, Dorsey said in 2019 when he announced Bluesky.

Bitcoin has also figured prominently at both of his companies. Square became one of the first public companies to own Bitcoin assets on its balance sheet, having invested $220 million (roughly Rs. 1,650 crore) in the cryptocurrency.

In August, Square created a new business unit called TBD to focus on Bitcoin. The company is also planning to build a hardware wallet for Bitcoin, a Bitcoin mining system, as well as a decentralised Bitcoin exchange.

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Twitter allows users to tip their favourite content creators with Bitcoin and has been testing integrations with non-fungible tokens (NFTs), a type of digital asset that allows people to collect unique digital art.

Analysts see the transition as a positive signal for Square, the fintech platform he co-founded in 2009. Square’s core Cash App, after a bull run in its share in 2020, has experienced slower growth in the most recent quarter. It is also trying to digest the $29 billion (roughly Rs. 2,17,240 crore) acquisition of Buy Now Pay Later provider Afterpay, its largest acquisition ever.

But these ambitions will not pay off until years from now, analysts cautioned.

“The blockchain platform they’re trying to develop is great but also fraught with technical challenges and difficult to scale for consumers. I think he’ll focus more on Square and crypto will be part of that,” said Christopher Brendler, an analyst at DA Davidson.

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© Thomson Reuters 2021

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Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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