Analysis: Musk's $5 billion Tesla stock haul has charity circuit buzzing
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Thursday
February 02, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
THURSDAY, FEBRUARY 02, 2023
Analysis: Musk's $5 billion Tesla stock haul has charity circuit buzzing

World+Biz

Reuters
13 November, 2021, 09:55 am
Last modified: 13 November, 2021, 09:55 am

Related News

  • Elon Musk, White House discuss electric vehicles
  • Elon Musk now 'Mr. Tweet' on Twitter
  • Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 mln vehicles
  • Musk says China rivals 'work hardest, smartest'
  • Elon Musk: Tweets about taking Tesla private weren't fraud

Analysis: Musk's $5 billion Tesla stock haul has charity circuit buzzing

Musk's public philanthropy gestures have so far trailed other billionaires

Reuters
13 November, 2021, 09:55 am
Last modified: 13 November, 2021, 09:55 am
FILE PHOTO: SpaceX founder and chief engineer Elon Musk speaks at a post-launch news conference to discuss the SpaceX Crew Dragon astronaut capsule in-flight abort test at the Kennedy Space Center in Cape Canaveral, Florida, US January 19, 2020. REUTERS/Joe Skipper/File Photo
FILE PHOTO: SpaceX founder and chief engineer Elon Musk speaks at a post-launch news conference to discuss the SpaceX Crew Dragon astronaut capsule in-flight abort test at the Kennedy Space Center in Cape Canaveral, Florida, US January 19, 2020. REUTERS/Joe Skipper/File Photo

The world's richest man suddenly has more cash than most people can spend in their lifetime. What will he do with it?

Elon Musk, whose net worth is pegged by Forbes at $270 billion, had traditionally kept his wealth tied up in his stake in Tesla Inc, the electric car maker founded in 2003. He borrowed against his stock when he needed more cash and sold stock mostly to cover tax obligations.

That was until this week, when his trust sold close to $5 billion worth of Tesla stock in the open market after Twitter users voted for him to sell 10% of his shares in an online poll he created. He sold an additional $1.1 billion worth of Tesla stock to pay taxes associated with the exercising of stock options.

More stock sales are expected given that he has sold only about 3% of his Tesla shares thus far. He has not disclosed what he will do with the proceeds, yet the cash haul has already created a buzz among major charities which are always vying for wealthy donors.

"His opportunity to have great impact is to donate very significant sums of money to leading organizations that are dealing with the most pressing problems with global poverty and access to healthcare," Melissa Berman, CEO of Rockefeller Philanthropy Advisors, a nonprofit that advises on charitable giving, said in an interview.

Musk did not respond to requests for comment on his plans.

Musk's public philanthropy gestures have so far trailed other billionaires. Musk and Amazon.com Inc founder Jeff Bezos have donated less than 1% of their net worth, whereas Warren Buffett and George Soros had given away more than 20% of their net worth as of early September, according to Forbes.

It is possible, however, that many of Musk's charitable donations have not been made public.

Musk signed the Giving Pledge in 2012, a commitment by some billionaires to give at least half their wealth to philanthropy in their lifetime or upon their death. In 2001, he set up the Musk Foundation, offering grants for the "development of safe artificial intelligence to benefit humanity" among other causes, according to its website.

Musk's foundation has over $200 million in assets, which "isn't that big" compared with his fortune, said Brad Smith, the president of Candid, a nonprofit information service that provides information on other nonprofits and foundations.

Earlier this year, Musk and his foundation offered a top prize of $50 million to the inventor who can come up with a technology to help remove carbon from the atmosphere. The prize has yet to be won.

Musk has also flirted with more ambitious philanthropy goals. He tweeted last month that "if (the United Nations World Food Programme) can describe ... exactly how $6 billion will solve world hunger, I will sell Tesla stock right now and do it."

Musk was responding to a plea for a donation from David Beasley, the World Food Programme's executive director. Beasley tweeted he was willing to meet Musk to provide more details, and it is not clear if the two explored the idea further.

Beasley and the World Food Programme did not immediately respond to a request for comment.

Musk has shown in previous tweets that he is thinking about ways to have a big philanthropic impact. In January, he asked Twitter users about "ways to donate money that really make a difference (way harder than it seems.)"

TAX INCENTIVES

There are also tax benefits associated with charitable giving. Under the US tax code, most donations can be deducted from one's taxable income.

"Almost any billionaire that you can think of donates money and minimizes tax bills," said Ray Madoff, a professor at Boston College Law School where she is director of the Forum on Philanthropy and the Public Good.

Besides donating cash, there would be an additional tax benefit for Musk gifting Tesla stock. This is because shares that are donated to charity are not subject to capital gains tax, as they would be if they were sold.

"It's like a double bonus of donating. He is in a position where there's a substantial incentive to donate," said Brian Mittendorf, an accounting professor at the Ohio State University.

Musk's younger brother, Kimbal Musk, who is also a Tesla board member, deployed that tactic as recently as last week. He gifted 25,000 Tesla shares worth $31 million to an unidentified charity.

With Tesla's shares hovering near record highs, Musk could take advantage of their current valuation by donating more of them, said Bob Lord, an associate fellow at the Institute for Policy Studies who studies tax policy.

"If you're going to donate stock, when do you want to donate it? When it is at its peak," Lord said.

Elon Musk / Tesla / charity

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Representational image. Photo: Mohammad Minhaj Uddin/TBS
    Export earnings saw 5.89% growth in January
  • Representational image/File photo
    Stocks trading higher on narrowing trade deficit, inching up remittance inflow
  • Song of the farmers as boro begins
    Song of the farmers as boro begins

MOST VIEWED

  • General view of a Shell petrol station sign in Milton Keynes, Britain, January 5, 2022. REUTERS/Andrew Boyers/File Photo GLOBAL BUSINESS WEEK AHEAD
    Shell annual profit hits record $42.3 billion
  • Photo: Collected
    Adani calls off share sale: What is an FPO? How is it different from IPO?
  • MPs of like-minded opposition parties in a meeting at Leader of Opposition Mallikarjun Kharge's chamber in Parliament House during Budget Session, in New Delhi, Thursday, Feb. 2, 2023. Photo: Collected
    Adani crisis: Oppn seeks probe into LIC, banks exposure ‘endangering savings’
  • Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. REUTERS/Amir Cohen
    Gautam Adani speaks about turmoil for first time after scrapping share sale
  • Indian congress jabs at Adani's ‘morally correct’ remark
    Indian congress jabs at Adani's ‘morally correct’ remark
  • People wearing face masks following the coronavirus disease (Covid-19) outbreak are seen at Beijing Daxing International Airport in Beijing, China July 23, 2020. Photo:Reuters
    Pandemic to paradise: Chinese tourists return to Bali after three years

Related News

  • Elon Musk, White House discuss electric vehicles
  • Elon Musk now 'Mr. Tweet' on Twitter
  • Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 mln vehicles
  • Musk says China rivals 'work hardest, smartest'
  • Elon Musk: Tweets about taking Tesla private weren't fraud

Features

Six Jeep Wranglers and a special XJ Jeep Cherokee set out into the depths of Lalakhal, Sylhet for an experience of a lifetime. Photo: Ahbaar Mohammad

Jeep Life Bangladesh: A club for Jeep owners to harness the power of their vehicles

2h | Wheels
While the Padma bridge in operation is changing the lives of millions in the south for the better, passenger rush to Shimulia ghat died down. Photo: Masum Billah

How are the Shimulia ghat businesses faring after Padma bridge?

4h | Panorama
After so many investments going embarrassingly wrong, as was the case with Sam Bankman-Fried, perhaps tech investors’ preference for less experience will wane. Photo: Bloomberg

Are you the next Steve Jobs? Good luck raising money in 2023

4h | Panorama
An elderly couple's lonely battle to save Dhaka's trees

An elderly couple's lonely battle to save Dhaka's trees

1d | Panorama

More Videos from TBS

Is Hathurusingha the most successful coach of Bangladesh?

Is Hathurusingha the most successful coach of Bangladesh?

17h | TBS SPORTS
Semiconductor, pharma should get more attention

Semiconductor, pharma should get more attention

19h | TBS Round Table
Dhali Al Mamun’s art depicts colonial impact

Dhali Al Mamun’s art depicts colonial impact

18h | TBS Stories
Jewel's humanitarian store

Jewel's humanitarian store

16h | TBS Stories

Most Read

1
Bapex calls candidates for job test 9 years after advert!
Bangladesh

Bapex calls candidates for job test 9 years after advert!

2
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

3
Photo: Collected
Energy

8 Ctg power plants out of production

4
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

5
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

6
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]