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Price of Tesla Stock Drops 9 Percent as Elon Musk Faces $13 Billion Tax Bill

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Elon Musk

Elon Musk, Chief Executive Officer (CEO) of Tesla, is presently owing more than $13 billion in both state and federal taxes according to numerous reports from the United States.

The billionaire had asked his over 62 million Twitter followers over the weekend whether he should sell 10 percent of his Tesla holdings. “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Musk tweeted.

As reported by Investors King, the results were 58 percent in support of selling while 42 percent voted against the billionaire’s decision. However, a new report has noted that regardless of the outcome of the poll, Musk would still have to sell given the size of his debt.

In 2012, the billionaire was awarded options as part of a compensation plan because he doesn’t collect salary or cash bonus, therefore his wealth comes from stocks award and the gains in Tesla’s share price. Musk was awarded 22.8 million shares at $6.24 per share in 2012. Tesla stock was hovering around $1,050 a unit at the time of writing, meaning Musk’s gain on the shares is about N23.797 Billion.

But because the billionaire has to pay income tax on the gain since the options are taxed as an employee benefit or compensation. They will be taxed at top ordinary-income levels, or 37 percent plus the 3.8 percent net investment tax. Also, he will have to pay the 13.3 percent top tax rate in California since the options were granted while he was a resident in California.

In total, the billionaire would be paying 54.1 percent in state and federal tax. Meaning, the total tax bill on Musk’s options at the present price would be around $12.874 billion.

While Musk didn’t confirm the size of his tax bill in his tweets, he suggested he can only pay his taxes by selling some of his holdings. “Note, I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.”

Tesla stock closed at $1222 on Friday but started plunging on Monday after Musk’s tweet as some investors and analysts were interpreting the billionaire’s decision to sell as cashout.

Wall Street Journal on Tuesday said “Did Elon Musk outsource the decision of whether to sell his Tesla stock to his Twitter followers because he’s a wacky billionaire who is angry about Democratic tax plans? Or is it because he knows more about Tesla’s true value than anyone else, and thinks now’s the time to get out?

“Either way, it’s a good time to sell as the three trends that helped Tesla shares soar are fickle and might reverse at any time.”

Michael Burry, a big short investor who has criticised Elon Musk and described Tesla stock as overpriced, said regardless of what the billionaire claimed was the reason for selling the 10 percent, he has to pay back personal loans he used 88.9 million of his shares as security for on June 30, 2021.

“Regarding what @elonmusk NEEDS to sell because of the proposed unrealized gains tax, or to #solveworldhunger, or … well, there is the matter of the tax-free cash he took out in the form of personal loans backed by 88.3 million of his shares at June 30th,” the investor tweeted.

Burry then went on to share a link to Securities and Exchange Commission filing in August that said Musk had pledged about 88 million shares, or 36 percent of his total stake, as collateral for personal loans as of June 30.

The uncertainty surrounding the real reason for the sale is forcing several retail investors to start taking profit as they await more clarity. Still, the billionaire Tesla holdings outside his options or compensation worth over $200 billion.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Facebook CEO Mark Zuckerberg Loses 400% of Dangote’s Net Worth in 2022

Mark Zuckerberg’s net worth has nose-dived by more than 50 percent this year, losing over $70 billion

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Mark Zuckerberg - Investors King

Facebook Founder and Meta Chief Executive Officer (CEO), Mark Zuckerberg’s net worth has nose-dived by more than 50 percent this year, losing over $70 billion.

Mark Zuckerberg’s net worth has plummeted very hard this year amid huge investments in the metaverse. 

In April 2021, Facebook said it had spent around $10 billion on metaverse investments while more than 10,000 people are working on its metaverse projects.

According to Bloomberg’s Billionaire Index, Zuckerberg started 2022 with a fortune of $125 billion but has since fallen by 55 percent to $55.3 billion this year. 

Zuckerberg’s Facebook started in 2021 with a lot of enthusiasm and hope. In 2021, Facebook was rebranded to Meta as the parent company while Mark disclosed that Facebook will invest heavily in Metaverse. 

Facebook however steeped in controversy with Frances Haugen’s leaked information. At the end of the 2021 financial year, the company reported its first-ever decline in users. 

Mark Zuckerberg lost in 2022 so far which stands at $70 billion is four times the net worth of Africa’s richest man, Aliko Dangote. Aliko Dangote is worth $18.8 billion according to Bloomberg’s Billionaire Index.

Zuckerberg’s net worth of $55.3 billion placed him at number 20 on the billionaire index, far below Elon Musk’s net worth estimated at $268 billion. 

The 38-year-old billionaire, who also doubled as the owner of WhatsApp, Instagram and Occult, however believed that the company’s investment in the metaverse space will be worth it in the near future. 

“The metaverse business for us isn’t really going to be a meaningful contributor to the business until at a minimum much later in this decade, and probably realistically this decade is going to be about setting the foundation for that and then the 2030s are really where this is going to contribute a lot to the profits of this company,” Zuckerberg said during the company’s annual shareholder meeting in May.

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Gautam Adani Displaces Amazon Founder, Jeff Bezos as World’s Second Richest Person

Indian business magnate Gautam Adani has displaced Amazon founder Jeff Bezos to become the second-richest person in the world with an estimated wealth of $146.8 billion.

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Gautam Adani

Indian business magnate Gautam Adani has displaced Amazon founder Jeff Bezos to become the second-richest person in the world with an estimated wealth of $146.8 billion.

According to Bloomberg, Gautam Adani is the first individual from Asia to rank in the top three of the billionaire’s index while Tesla Founder and CEO Elon Musk continue to be the world’s wealthiest individual with an estimated $263.9 billion.

Adani has witnessed a rapid increase in his wealth this year displacing Mukesh Ambani, Bill Gates, and Warren Buffet on the Bloomberg billionaire list. 

Adani owns shares in six publicly traded companies that operate in ports, airports, green energy, and data centres.

While several others on the Bloomberg billionaires index have shed wealth so far this year, Gautam Adani has added more than $60 billion to his fortune in 2022 alone. 

Investors King learnt that before February 2022, Gautam Adani was ranked below fellow Indian billionaire Mukesh Ambani who is worth $93.4 billion and is currently at the eighth position on the global ranking.

Adani controls Mundra Port which is India’s largest seaport. 

Around September 2020, he also acquired a 74% stake in Mumbai International Airport which is India’s second-busiest airport. This makes him the country’s biggest airport operator. In 2022, he also acquired Swiss giant Holcim’s cement business in India for $10.5 billion.

Strategically, Adani has set a big eye on green energy. He said he will invest up to $70 billion in renewable energy projects in his bid to become the world’s largest producer of green energy. It is not a surprise that shares in his renewable energy firm have spiked while shares in his power company, Adani Power have increased three-fold in the last year in response to rising energy demand.

Gautam Adani is a college dropout who spurned his father’s textile shop to set up a commodities export firm in 1988. He survived the terrorist attack in Mumbai’s Taj Mahal Palace Hotel in 2008. He is 66 years old and happily married with two kids.

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Abdulsamad Earns N90.868 Billion in 24 Hours

Nigeria’s third richest person and leading philanthropist, Abdulsamad Rabiu earned N90.868 billion in the last 24 hours.

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Abdul Samad Rabiu

Nigeria’s third-richest person and leading philanthropist, Abdulsamad Rabiu earned N90.868 billion in the last 24 hours.

Rabiu, 62, owns 16.173 billion or 89.85% direct shares in BUA Foods Plc and another 500.485 million or 2.78% in indirect shares in the company.

Together, the billionaire philanthropist owned a combined 16.673 billion or 92.63% shares in BUA Foods Plc.

On Friday, the stock of BUA Foods appreciated by N5.45 or 10% from N54.50 it closed on Thursday to N59.95 a unit on Friday.

Meaning, Rabiu’s holdings in the company grew by N90.868 billion in the last 24 hours if his total shareholdings of 16.673 billion is multiplied by the N5.45 gain realised on Friday.

BUA Food reported a N168.855 billion turnover in the first half (H1) of 2022, representing an increase of 11.29% from N151.731 billion recorded in the same period of 2021.

The company’s gross profit rose by 1.79% to N52.066 billion, up from N51.151 billion achieved in the corresponding period of 2021.

Therefore, BUA Foods realised 10.78% in profit after tax to declare N42.702 billion for the period under review.

Presently ranked 5th richest person in Africa and 350th in the world, Rabiu is the founder of BUA Group, a Nigerian conglomerate active in cement production, sugar refining and real estate.

The billionaire owns about 96% of BUA Cement Plc, one of Nigeria’s leading cement manufacturing companies, estimated at N1.79 trillion.

Explaining how he grew BUA Cement to the point of listing, Rabiu said “Two years ago, we listed our cement businesses. We had endorsement and Sokoto cement and those businesses were listed, we consolidated the business and we now have BUA Cement PLC with a combined capacity of 11 million tonnes as it is, we are set to rise to 17 million tonnes per annum by the middle of next year with the commissioning of new plants next year.

“And also, we consolidated our foods businesses across all our divisions: the flour milling; the sugar refinery; the oil milling and what have you. I listed that in January 2022 with that, we have a market capitalisation of over N1trn.”

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