Elon Musk’s latest stunt is an example of trolling. That much is obvious. What is less clear is who exactly is being trolled. The controversial Tesla chief executive has said that, following the results of a Twitter poll, he will sell roughly a tenth of his shares in the company, incurring the tax liability on his capital gains. This was, he said, a response to increasing claims that “unrealised capital gains are a form of tax avoidance”.
Shares plunged in response but it is not clear if shareholders were the victims of the prank. If Musk had sold his stake another way — quietly with nothing but a regulatory statement to the market, for example — then they might have dropped further. Investors could have taken fright at the idea there was some undisclosed bad news still to come out about the company. Instead Musk can realise some of his gains while saying it was just in response to the social media poll, providing justification for the sale.
It is unlikely to be a joke on the taxman. Musk tweeted that he does not take any salary or bonus from Tesla, meaning he usually has no income to tax. All he owns is stock and so, if he is to pay the government anything, then he has to sell some of his holdings. With the value of Tesla rocketing, he will face substantial capital gains tax if he sells, even after the big drop in the share price.