What happened
Shares of Tesla (TSLA +0.44%) dipped on Monday, falling as much as 7.3%. As of 10:20 a.m. EST, the stock was down about 3%.
The growth stock's decline comes as Tesla CEO Elon Musk proposed selling 10% of his stock. Over the weekend, the billionaire conducted a poll on Twitter, asking whether he should sell some shares and pay taxes on them.
Image source: Getty Images.
So what
If Musk follows through with his promise on Twitter to "abide by the results of this poll," he will indeed be selling 10% of his Tesla stock. Over 3.5 million people voted, with about 58% of votes saying that the CEO should sell 10% of his stock.
For why he proposed the partial sale, Musk said, "Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock." In addition, the CEO notes that since he doesn't take a cash salary or collect cash bonuses, stock sales are the only way he can pay taxes.
Now what
While some investors may interpret a move by Musk to sell shares as bearish, those investors may want to reconsider looking at this move with the glass half full (or 90% full, for that matter). Selling 10% of his shares means Musk would hold onto a whopping 90% of his massive stake in the company. The CEO currently owns more than 20% of Tesla, with the stake valued at well over $300 billion. Maintaining 90% of his holdings in Tesla would mean the billionaire's skin is in the game.
