Every time Elon Musk speaks, the bread goes up. The latest craze of this successful businessman has been to ask to your audience if you must sell a 10 of your actions of Tesla. A madness that has not been without controversy, but that has its explanation and that we will explain in detail in this post.
Full-time tycoon, philanthropist, influencer and troll
Elon Musk is known in the world of finance as a being able to increase the price of any cryptocurrency at the blow of Tweet. But many forget that Musk also has an evil villain within himself. Just as it can get you covered with Dogecoin or Shiba Inu, it can get you broke in less than 280 characters.
Last Saturday, the South African tycoon posted a poll on Twitter. “Should I sell 10% of my shares in Tesla?” 58% voted yes. The result was that this Monday, Tesla (TSLA on the NASDAQ) fell almost 5% in the stock market.
What prompted Elon Musk to do that poll?
But no, Elon had his little bit of reason for doing all of this. The context for this whole story comes from a proposal from the Democratic Senator Ron Wyden. He dropped that investing with unrealized gains is actually a way to avoid taxes – a totally unfortunate claim, by the way, since buying and holding value has been part of the spirit of the stock market for centuries.
Both in the United States and in any country, the tax of taxes of an investment is made only when the operation is closed, that is, when it is sold. Wyden proposed to collect annual taxes on shareholders, even if they do not close their positions in the market. And that pissed off Elon Musk quite a bit.
The butterfly Effect
The consequences of the tweet were quite evident. Before the pulse made by the senator, Musk was more hesitant and did not hesitate to propose to take 10% of his shares. Probably for show you have no problems to pay taxes with current regulations.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
– Elon Musk (@elonmusk) November 6, 2021
But the damage was done. Faced with the prospect of a bigwig like Elon dropping so many stocks at once, many investors decided to hedge and sell before Tesla’s stock price could plummet. A self-fulfilling prophecy, since Elon surely didn’t sell anything, but the share price went downhill and without brakes.
Elon Musk + Twitter = Controversy
It is not the first time that Elon Musk stars in a controversial story that relates his high influence on Twitter with a crash or rise in prices in the markets.
In August 2018, Elon was forced to leave the Tesla presidency when he hinted on Twitter that he could take Tesla out of the stock market. Despite this, he was able to fight to keep his position as CEO of the electric car company.
Recently this 2021 was shown as the influencer definitive of Bitcoin. He first made it public that Tesla had invested in Bitcoin and then accepted this means of payment for its vehicles. But a few weeks later, the businessman withdrew this form of payment and began to rant about the pollution and energy consumption behind Satoshi Nakamoto’s coin. A crash in the price of the currency which has taken almost 6 months to recover.