Elon Musk sold about $8.4 billion of his shares in Tesla this week as he seeks to raise the money to buy Twitter, according to filings with the US Securities and Exchange Commission. But the billionaire says he will not sell any more Tesla shares. Tesla “after today”.
Musk sold most of his shares on Tuesday and Wednesday, shedding 4.4 million shares, the documents show. He sold another 5.2 million shares on Thursday, after which tweeted“No further sales of TSLA are planned after today.”
Tesla’s share price plunged 12 percent on Tuesday and has since risen higher. The stock rose 3.9 percent on Friday.
On April 25, Twitter’s board of directors accepted Musk’s offer of $54.20 per share, or $44 billion, for full control of the company. It was the same price that he mentioned in his initial offer on April 14. After the transaction is complete, Twitter will become a private company. The deal still requires shareholder and regulator approval.
To finance the deal, Musk promised to secure $25.5 billion of fully committed debt, including $12.5 billion in loans against his Tesla shares. Notably, Musk does not list any equity partners with whom to share the cash burden. The Tesla CEO already owns a 9 percent stake in Twitter, valued at roughly $2.9 billion.
Tesla shares have lost about 20 percent of their value since Musk revealed his initial involvement on Twitter, prompting questions from investors about the unintended consequences for his electric car company.
“I think for Tesla shareholders, the Twitter news comes at a less than ideal time, because there are a lot of important goals and milestones for Tesla in the next six, nine and 12 months,” said Daniel Ives, an analyst at Wedbush Securities. the edge. He cited the long-delayed Cybertruck, Tesla’s new 4680 battery packs, continued construction of Gigafactories in Germany and Texas, and the recent reopening of the company’s factory in China.
“It just adds another variable in a nervous market,” Ives added. “It has definitely caused distress on the street.”
Musk is Tesla’s largest shareholder, owning about 17 percent of the company’s stock, or about 175 million shares in total. Musk has sold big lots of shares before. Last year he sold 15 million shares, worth more than $16 billion, after surveying his Twitter followers. Shares of the automaker plunged 16 percent in the next two trading days.
Tesla has volatile stocks, but Tuesday’s 12 percent drop was its worst daily decline since September 2020, when it lost about 21 percent of its value. according The New York Times. Some investors, including Musk himself, have suggested that Tesla’s share price is overvalued. The company’s market capitalization has far exceeded $1 trillion.
Other analysts cited Musk’s division of attention as a possible downside to his Twitter offer. In addition to Tesla, Musk also serves as CEO of SpaceX, The Boring Company, and Neuralink.
In its most recent quarterly earnings report, Tesla mentions Musk splitting his time with his other companies as a potential risk factor. “We depend heavily on the services of Elon Musk, technification of Tesla and our CEO,” the company states. “Although Mr. Musk spends a lot of time with Tesla and is very active in our administration, he does not devote all of his time and attention to Tesla.”