Mark Zuckerberg sold Meta Platforms Inc. stock almost every weekday of this year. The founders of Google began to unload shares in May, which is also when two of the three Airbnb Inc. co-founders started diversifying their stakes.
The transactions are part of a surge of selling by the very richest Americans. They unloaded $42.9 billion in stock through the start of December, more than double the $20.2 billion they sold in all of 2020, according to an analysis of transactions by U.S. billionaires on the Bloomberg Billionaires Index, a daily ranking of the world’s richest 500 people.
The super-wealthy often hold onto shares in the companies that made their fortunes, because realizing gains triggers a tax bill. But many rich Americans are deciding to unload shares now, while stock valuations are at records and before their taxes potentially rise at the start of 2022.
“A lot of our clients are selling,” said Elizabeth Sevilla, a partner at Seiler LLP, an advisory firm based in the San Francisco Bay area. Founders and venture capitalists are deciding they want to diversify concentrated positions, or “they’re looking at the market and saying, ‘We’re at the top of the market.’”
Plus, biting the tax bullet in 2021 may mean avoiding rate hikes in future years, she said.
Several of the world’s richest people have been selling core holdings after years of hibernation, including Sergey Brin and Larry Page, the reclusive co-founders of Google. So far this year, Page has sold around $1.8 billion in stock of Google parent Alphabet Inc. and Brin around $1.7 billion. It was the first time either had sold shares since 2017.
‘Unrealized Gains’
Elon Musk, the world’s richest person, has unloaded about $12.7 billion in Tesla Inc. shares this year, the first time he’s sold stock since 2016. The selling streak was unleashed after the billionaire, who has a personal fortune of $253.6 billion, asked in a Twitter poll last month whether he should divest 10% of his shares in the electric-auto maker.
“Much is made lately of unrealized gains being a means of tax avoidance,” he tweeted, promising to abide by the poll’s results.
Michael Dell, founder and chief executive officer of Dell Technologies Inc., hadn’t sold shares of his company in at least two years, or since it returned to public markets in 2018. So far this year, he’s disposed of about $500 million.
Whether avoiding taxes was their goal or not, selling in 2021 could help these billionaires save billions of dollars. Even as Musk framed his sales as tied to the outcome of a Twitter poll, some of the sale was pre-planned and displayed canny awareness of tax liabilities, both at the federal and state level.