Elon Musk had previously said he would have to exercise a large number of stock options in the next three months to pay the taxes.
Tesla Inc shares have fallen 5.4 percent in premarket trading as investors prepared for its chief Elon Musk’s proposed sale of about a tenth of his holdings in the electric-car maker following his Twitter poll.
Musk, the world’s richest person, tweeted on Saturday that he would offload 10 percent 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 percent of the people voted “Yes”.
The electric-vehicle maker’s shares were trading at $1,156.3 on Monday before the bell, and if the losses hold, it would wipe off about $66 billion.
Musk had previously said 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 only have stock, thus the only way for me to pay taxes personally is to sell stock,” Musk wrote along with his poll, “I was prepared to accept either outcome.”
At stake? $21 billion
Market participants expected speculators would try to front-run his selling.
Musk’s stake in Tesla was about 170.5 million shares as of June 30, and a 10 percent sale would amount to about $21 billion based on Friday’s closing price.
Including stock options, he owns 23 percent stake in the world’s most valuable car company.
In the three months to November 4, company insiders at Tesla sold $259.62 million worth of shares, excluding dispositions of indirectly held shares, according to Refinitiv data.
Musk’s poll follows a proposal by US Senate Democrats to tax stocks and other tradeable assets of billionaires to help finance President Joe Biden’s social spending plan and fill a loophole that has allowed the rich to defer capital gains taxes indefinitely.
Tesla breached a trillion dollars in market capitalisation last month, becoming the fifth US company to join a club, which includes Apple, Microsoft, Amazon and Alphabet.
“The dip isn’t going to last too long, because Tesla has had such a phenomenal record of bouncing back from these sort of selloffs,” said David Madden, markets analyst at Equiti Capital in London.
Known for his Twitter banter, announcements and lively interactions with followers, Musk has had his share of run-ins with financial regulators.
The billionaire was fined $20 million by the US Securities and Exchange Commission for tweeting in 2018 that he was considering taking Tesla private at $420 a share and had secured funding.
The SEC also asked him to step down as chairman.
Investors will keep an eye on any response from the regulators on Musk’s Twitter poll, especially because the regulator had ordered Tesla to vet any material public communications Musk made regarding the EV maker, following his 2018 tweet.