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The electric-car maker’s shares fell as much as 11.3% in morning trade before recouping some losses to trade at $1,086.4. They were on track to shed nearly $76 billion in market capitalization, or about the total market value of Ford Motor (NYSE:F), in addition to losing nearly $60 billion on Monday.
The rout comes after Musk asked his Twitter (NYSE:TWTR) followers over the weekend if he should sell 10% of his stake in the company as Washington proposes to hike taxes for the super-wealthy. Nearly 58% said they would support such a sale.
“People are anticipating that he is going to come into the market and start selling shares, they’re trying to get ahead of that,” said Dennis Dick, a trader at Bright Trading LLC.
Musk could time the proposed sale to coincide with a federal tax bill of nearly $11 billion that would be triggered by exercising a chunk of his Tesla (NASDAQ:TSLA) stock options worth $26.6 billion as of Monday close.
While the stock sale could solve a major tax headache, Musk’s tweets raised questions about violation of his settlement with the U.S. securities regulator. He was fined $20 million by the U.S. Securities and Exchange Commission (SEC) for tweets in 2018 and was required to step down as chairman.
Kimbal Musk, Elon Musk’s brother, on Friday filed to sell 88,500 Tesla shares worth $109 million.
Investors will be closely watching SEC filings from Tesla for any details on Musk’s plans. SEC rules give companies four working days to report major events.
