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Recently (26 October 2021), CNN published an article with the eye-catching headline:

2% of Elon Musk's wealth could solve world hunger, says director of UN food scarcity organization

This was subsequently debunked on Twitter to which Elon Musk replied:

If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.

Drama ensued (and is still ensuing). David Beasley, who was CNN's source, tweeted Headline not accurate. $6B will not solve world hunger. CNN later modified the misleading title of their original article to the vacuously true "2% of Elon Musk's wealth could help solve world hunger". (See e.g. Can we end poverty for $US175 billion per year? to get an idea of how unrealistic CNN's original title is.) TL;DR: $US6 billion is being requested to prevent 42 million people dying from starvation.

Putting aside the debunked claim that $US6 billion could “solve world hunger”, ...

Question: Could Elon Musk sell $US6 billion in stock “right now”?

It seems fairly clear that Elon Musk believes he could actually do this if he chose to, and has requested specifics in response to David Beasley's clarification.

However (in my mind at least), selling $US6 billion in stock sounds extraordinary complicated; I would think it’d take months or even years to do so, if it were even possible at all.

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    Deleted political opinions about whether $6b could solve world hunger. Comments are for improving the question.
    – Oddthinking ♦
    Commented Nov 2, 2021 at 16:56
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    I think the problem here is that "right now" is a very imprecise term. It could be the second Musk recieves a reply (obviously impossible), or it could be as long as millenia: e.g. "The Earth is in an interglacial period right now" :-)
    – jamesqf
    Commented Nov 3, 2021 at 4:02
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    Interesting discussion moved to chat. Please continue it there.
    – user11643
    Commented Nov 3, 2021 at 13:13
  • We now have another World Hunger cost question.
    – Oddthinking ♦
    Commented Sep 25, 2023 at 0:57
  • @jamesqf, it is imprecise, but I'd interpret this in this context as "within 30 days." A timeframe that allows basic logistics, but doesn't require big market changes, corportate restructuring, etc.
    – Paul Draper
    Commented Sep 25, 2023 at 2:14

1 Answer 1

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The current trading volume of Tesla stock is at an average of 20M shares per day. At the current stock price, that's a volume of around $24B per day. However trading volumes fluctuate and today a total of 56M shares were moved around or $67B. So the market naturally sees fluctuations that are far bigger than Elon's proposed sale of stock. Elon would also be extremely likely to sell the stock via a block trade to minimize influence on the stock price.

That being said, company insiders have to report their stock sales in advance and wait for the next window period. For Tesla this would be around January 2022 given their schedule of quarterly earnings disclosures. As a company insider he is also prohibited by the same SEC rules from margin borrowing against his Tesla stocks, so he couldn’t use his stocks as collateral.

So could he sell the stock "right now"? No, according to SEC rules he would have to wait for the next Tesla trading window.

Could he obtain $6B "right now" to send to WFP? Most likely yes, by using whatever other liquid investments/cash he has or borrowing the money. He won’t be allowed to use Tesla stock as collateral but someone with his reputation could certainly secure a loan for 2% of his current net worth.

Could he quickly sell $6B on the stock market assuming it was cleared by the SEC? Yes, that's an amount within the usual trading volumes seen for Tesla shares.

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    A block trade essentially spreads out the sale over time... or involves finding (beforehand) an investor willing to buy the whole thig.
    – Believe it or not...
    Commented Nov 2, 2021 at 7:03
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    And a $19B block trade "blew up" (in March), in the sense that it was discovered as such, sending the stocks involved down (by $33bn). ft.com/content/1b9119b2-0d8b-4a9d-b0a2-d10a021cd71b $6B might pass though.
    – Believe it or not...
    Commented Nov 2, 2021 at 7:14
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    And then we have to assume that Musk actually holds such a volume in public stock that can actually be traded. If he's like other company owners I know and have known, a good part of their stock is excluded from public trade explicitly by the company statutes, and can only be sold either to other board members or family members (depending on the management structure of the company).
    – jwenting
    Commented Nov 2, 2021 at 12:42
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    @NeilMeyer Restricted stock units are a common form of executive compensation. They normally become marketable either at a fixed date in the future, or a specified amount of time after the employee leaves the company. The purpose of RSUs is to give the recipient an incentive to focus on long-term rather than short-term company performance.
    – Nobody
    Commented Nov 2, 2021 at 19:10
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    @Nobody in any case arguing over whether or not Elon Musk can procur 6 billion is ridiculous at the end of the day :-)
    – JonathanReez
    Commented Nov 2, 2021 at 19:15

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