As is often the case with Elon Musk, it all started with a tweet. The founder of Tesla and SpaceX is ultra-popular on Twitter, and he loves to provoke on the social network to make his millions of followers react. They are currently close to 63 million and love the atypical way of communicating of the richest man on the planet.
Now that he has become the richest man on the planet with a colossal fortune exceeding 300 billion dollars, Elon Musk crystallizes all the criticism. He has taken the place of Jeff Bezos who has occupied the unenviable status of the richest man in the world for the past few months.
If this status is unenviable, it is because all the criticism of the ultra-rich is more readily focused on you. So Elon Musk is going to have to get used to that. For the past few months, there has been a lot of controversy about the fact that the ultra-rich in the U.S. don't pay enough taxes even though their wealth has increased by more than $2.1T since the start of the COVID-19 pandemic
The Cantillon Effect is at work here, and politicians are quick to throw the ultra-rich to the wolves.
Elon Musk plans to sell 10% of his Tesla stocks and asks his followers for their opinion
Elon Musk, therefore, reacted on November 6, 2021, by posting a tweet with a poll:
Elon Musk is therefore going back on the declared will of Janet Yellen, the US Treasury Secretary, to tax unrealized capital gains. Many explain that this is a way to avoid taxation. Elon Musk, therefore, proposed to sell 10% of his Tesla stock and asked his followers if they supported this idea.
The result was clear: out of 3.5 million votes, 57.9% of voters said they supported this idea launched by Elon Musk in an impromptu way.
The Tesla CEO then said that for him, selling his Tesla stock was the only way to pay taxes. Elon Musk does not receive any salary or bonus for his position as CEO of Tesla. He only owns shares in his company. This is a long-standing choice.
Elon Musk currently holds 21% of Tesla's capital. A sale of 10% of his shares would bring him a little over 20 billion dollars. Elon Musk would then have to pay about $5 billion in taxes on this sale. Beyond this provocative survey, Elon Musk is obliged to make such a sale in the coming weeks.
Elon Musk needs cash to buy back Tesla options that expire in 2022
In place of his salary, Elon Musk has been awarded stock options on several occasions. This was notably the case in 2012 and 2018. Nine years ago, this option allowed him to buy 22.86 million shares in Tesla at $6.24 each. Elon Musk could pocket more than 27 billion dollars in the operation, but he must act quickly, because these stock options expire in August 2022.
Elon Musk, therefore, needs to finance these operations, hence his obligation to make a sale of shares. In September 2021, Elon Musk had already explained this in an interview:
“I have a bunch of options that expire early next year, so this huge block of options will have to be sold in the fourth quarter of 2021. I have to do it where they expire.”
In the past, Elon Musk has already sold shares twice. In 2010, before Tesla's IPO, Elon Musk sold 1.4 million shares for $24 million. Then, in 2016, he had sold $2.7 million of them, or $593 million, to cover taxes due on options he had exercised.
The deal will prove to be even more lucrative this year.
In the meantime, the SEC probably didn't appreciate this new tweet from Elon Musk, which will have caused Tesla's share price to fall since the beginning of this week. More than 150 billion dollars of market cap went up in smoke. However, since a previous call to order, Elon Musk was now supposed to consult a lawyer for each post about Tesla on Twitter.
To protect his cash from the great monetary inflation, Bitcoin will be Elon Musk's best option
In the Bitcoin world, this tweet from Elon Musk obviously caused a stir.
Everyone is now fantasizing about a massive BTC purchase by Elon Musk. Buying Tesla stock options expiring in 2022 will cost Elon Musk $142,646,400 million. If Elon Musk were to sell 10% of his Tesla shares, he would have several billion dollars in cash left.
What could he do with such a financial windfall?
In today's highly inflationary monetary environment, Elon Musk's options are few and far between. In the process of supplanting gold as the reserve value of reference in a world where everything is becoming digital, Bitcoin has many advantages. Elon Musk could be tempted just as he was with some of Tesla's cash reserves in early 2021.
A massive purchase of Bitcoin by Elon Musk would be an extremely bullish signal in a market that is already on the verge of euphoria as Bitcoin has just reached a new All-Time High (ATH) above $68K. This potential purchase by Elon Musk could start a new and very strong bullish wave in Bitcoin culminating in $100K by the end of 2021.
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