The Chief Executive of Tesla, Elon Musk, asked his 62.8 million Twitter followers if he should sell 10 percent of his shares in the electric car company over the weekend. Behind this proposition was the claim that this was how he could pay taxes on ‘unrealised capital gains.’
He added that, as he cannot take a cash bonus, the only way for him to “pay taxes personally” was to sell stock in the electric carmaker. The share’s worth stands at $21bn (£15.5bn), a meagre sum compared to Musk’s substantial $338bn in Tesla and Space-X shares.
His Tweet is thought to have come in response to the Democrats proposal in Congress to tackle economic inequality in the US. The introduction of a billionaires’ tax would see individuals paying based off the annual increase in value of their stocks and shares. Currently, taxes on stocks and shares are only paid when the sell up.
As of Tuesday, results from the poll show 57.9 percent of voters are in favour of Musk selling his stocks. Considering his subsequent Tweet promising he will abide to the poll results, “whichever way it goes,” the resulting reaction has been a fall in Tesla shares by 7 percent (later recovering back up to 5 percent) – making it the biggest drag on the index.
Regarding ‘abiding’ to his promise, he has no formal requirement to do so, but could face trouble from regulators if he does not follow through since the announcement has affected the share price. Should he go ahead with the sale, it could leave him with a hefty tax bill.
Power of communication
Mr Musk’s Twitter poll has raised eyebrows in the world of finance. It is clear that the Tesla CEO conducted the poll to prove a point about tax, but in doing so has proved something else: the boundless power of having your own platform to communicate.
It is a topic we have written about in the past – the value of families and family businesses, even if they are understated, having their own websites to communicate information about themselves.
Controlled platforms, like personal websites, enable businesses and the people behind them to communicate legitimate information directly to the public - in a language that they can understand and control - rather than have it disintermediated by the public.
Musk is ahead of the game
Elon Musk takes this to the extreme (as one might expect). His platform of almost 63 million followers on Twitter, his seemingly favoured form of communication, allows him to directly share news about himself and his business with a click of a button.
The power he has in communicating in this way is that he does so on his own terms.
This uninterrupted contact with the public gives Musk a strategic advantage over his peers, competitors, and others, more generally. As increasingly more individuals and families recognise the importance of their reputation, we will start to see more families building upon their own controlled platforms for communication.
- Create or strengthen your platform. Ensure you have a platform in which to directly communicate to your audience – stakeholders, investors, and the public. Whether this is a social media platform or a website, it is crucial to share news without disintermediation from the press and public.
- Know your limits. Musk’s Twitter poll suits his brand – the revolutionary billionaire who ponders space travel and regularly shares, however, this is not for everyone. Think carefully about how you interact with the public. Despite the resulting fall in Tesla shares because of the tweet, Musk’s reputation will likely sustain.
- Tailor your platform to stakeholders. Different forms of communication work for different stakeholders. For example, if your main stakeholders are your employees, you might fair better communication through newsletter. If they are your customers, a social media platform like Twitter may be more suitable.