In the worst one-day decline this year, Tesla shares tumbled nearly 12% Tuesday to $1,023.50 per share, erasing $140 billion in market value for the electric car maker. It’s the second day of declines; Tesla is down 16% since Monday morning, though the company’s market cap still sits above $1 trillion and its shares are still up 148% over the last year.
Musk’s fortune fell $33.3 billion as of 4 p.m. ET Tuesday as a result of the plunge, pushing his net worth to $271 billion, down from $304.3 billion at the close of trading on Monday. He’s still the richest person in the world, according to Forbes, ahead of Amazon founder Jeff Bezos, the world’s second-richest person at $204.1 billion. Musk became the richest person to ever walk the planet last week when his fortune reached $300 billion for the first time.
The decline in Tesla shares started after Musk created a Twitter poll over the weekend asking if he should sell 10% of his stake in Tesla, prefacing the suggestion with a statement about taxes: “Much is made lately of unrealized gains being a means of tax avoidance.” It was a response to a failed Democratic proposal last month to tax billionaires’ unrealized gains in public companies as a means of harvesting tax income from billionaires. Since Musk doesn’t get a paycheck from Tesla, he doesn’t have to pay federal taxes on his massive fortune—most of which sits in his 23% stake in Tesla—unless he cashes out his shares. “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,” Musk tweeted Saturday.
Nearly 58% of users voted yes in the poll, but he hasn’t actually gone through with the transaction yet. If he does, Musk would owe nearly $5 billion in capital gains taxes to the federal government. It’s likely he’ll use the proceeds to pay additional taxes to exercise a tranche of Tesla stock options that expires next year.