Why Elon Musk will sell his Tesla shares regardless of the Twitter result?

Elon Musk, in his trademark fashion, opened up a Twitter survey, asking his followers whether to sell his 10 percent Tesla stock for tax purposes.  Musk tweeted, “ Much is made lately of unrealized gains being a means of tax avoidance. So I propose selling 10% of my Tesla stock. I will abide by the results of this poll, whichever way it goes”.

While followers might glee at the result, in which 58 percent favored selling the stocks, Musk is probably selling with or without their approval. And here is why?

Stock option that Musk was awarded by Tesla in 2012 expires this August. However, Musk has sold off a lot of his properties and collected huge loans keeping his shares as collateral. This means that he is probably short of cash, and desperately needs to sell his existing stocks at premium price in order to buy out his stock options that have been valued at $6.24. Keep in mind that market value of Tesla stock today is around $1222. 

That leads to yet another reason why Musk will probably sell his stocks. Musk will need to pay a big chunk in the form of capital gains tax after purchasing his available stock option. CNBC estimates that the tax will exceed $15 billion dollar after amounting for 37 % income tax, 3.8 % investment tax and 13.3 % top capital gains tax. 

So, before you go thinking that Elon Musk is this eccentric billionaire with weird quirks next time, think hard. After all, you do not become the world richest person following the whims of Twitter followers!