Elon Musk, smart trading model? This is what the experts say By Investing.com

By Laura Sánchez

Investing.com – When Elon Musk polled his Twitter (NYSE 🙂 followers over the weekend about whether or not he should sell his Tesla (NASDAQ 🙂 stock, it might seem like the tycoon’s typical weird move.

But financial professionals say Musk’s tweet was possibly driven by a desire to employ a smart year-end fiscal strategy. And they note that investors should carefully examine their portfolios before December 31.

Richard Austin, a financial advisor at Integrated Partners, puts it this way: “Live your life like Elon Musk.” Even if you don’t have Musk-level wealth, collect MarketWatch.

In the tweet, Musk addressed the issue that unrealized capital gains are “a means of tax evasion,” something that has been discussed as part of tax reform initiatives, and proposed to sell 10% of his Tesla shares. . Of the 3.5 million followers who responded, 58% said they should sell.

As finance experts have already pointed out, Musk is in a situation where he has almost no choice but to sell: he has stock options, on nearly 23 million shares, due to expire in August 2022. And Musk previously noted his intention to sell a “Big Block” in the fourth quarter of this year.

According CNBC, Musk’s options would generate a profit of almost 28,000 million dollars and that the bill of taxes on the sale could be around 15,000 million.

Musk could exercise all of his stock options this year. Or it could do it next year. But some financial professionals think their strategy may be to split the sale over two years for tax purposes.

It is about weighing the opportunity cost, says Harry Kirkpatrick, financial planner at the firm Facet Wealth, collects MarketWatch.

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Elon Musk, smart trading model? This is what the experts say By Investing.com