Tesla Inc shares fell nearly 7% on Tuesday, extending losses for a second straight day, as investors dumped the high-flying stock in anticipation of a possible stake sale by company chief Elon Musk.
A Tesla logo is seen at the Tesla Shanghai Gigafactory in Shanghai, China January 7, 2019. REUTERS/Aly Songshares fell nearly 7% on Tuesday, extending losses for a second straight day, as investors dumped the high-flying stock in anticipation of a possible stake sale by company chief Elon Musk.
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 MotorThe rout comes after Musk asked his Twitter 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.
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 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 for tweets in 2018 and was required to step down as chairman.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.
Reporting by Sruthi Shankar and Devik Jain in Bengaluru, Hyunjoo Jin in San Francisco; Editing by Subhranshu Sahu and Anil D'SilvaSubscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
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