Tesla shares plunged 10% in just minutes and Musk lost billions after famous short-seller Michael Burry claims Musk is selling Tesla shares to cover personal debts
Over the weekend, Elon Musk launched his first-ever Twitter poll to ask Twitter users if he should sell 10% of his Tesla stock to pay billion in taxes. 24 hours later, 58% of Twitter poll respondents say Musk should sell 10% of his Tesla stock to pay billions in tax liability.
As part of the tweet, Musk cited the unrealized gains as the reason for wanting to sell 10% of Tesla stock. But famous short-seller Michael Burry of The Big Short game disagreed. Burry came out of the Twitter dungeon to explain the real reason why Musk all of a sudden be in the mood to start selling stock.
Immediately after his tweet, Tesla shares plunged 10% in just minutes, leading many to speculate as to whether or not Musk was telling everyone the truth behind the selling. Burry also jabbed at Musk, further suggesting that the Tesla CEO may need to sell his shares because he had 88 million of them pledged as loan collateral.
“Regarding what @elonmusk NEEDS to sell because of the proposed unrealized gains tax, or to #solveworldhunger, or … well, there is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th,” Burry wrote in a now-deleted tweet that was captured by the Business Insider.
Business Insider further noted that “Burry appeared to be suggesting that Musk isn’t eyeing a stock sale in order to feed millions of people, in response to a legislative proposal, or because he could face a $10 billion tax bill when he exercises a slew of stock options that expire in August 2022.”
“Instead, Burry’s theory is that Musk needs some cash to service the loans he’s taken out using his Tesla stock. That practice drew heavy scrutiny this summer after a ProPublica investigation detailed how some of the world’s wealthiest people borrowed against their stock to minimize their tax burdens,” Business Insider wrote.