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CNN Business
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Elon Musk has sold $3.95 billion worth of Tesla stock since completing his buy twitter at the end of last month.
Musk’s share sales in Tesla, totaling 19.5 million shares, have been widely anticipated since the Tesla CEO reached an agreement to buy Twitter for $44 billion. Musk had sold blocks of Tesla shares worth a total of $15.4 billion earlier this year since his deal to buy Twitter was announced.
Twitter confirmed that Musk bought the social media company on October 27, but waited until November 4 to start selling additional Tesla shares. He also sold blocks of Tesla shares on Monday and Tuesday of this week, according to documents filed with the Securities and Exchange Commission late Tuesday.
It’s unclear whether the money Musk raised went to buy Twitter or to support losses at Twitter since he took over.
Musk revealed last week that Twitter has seen a “massive drop in income”, as a growing number of advertisers stop spending on the platform in the wake of their acquisition of the company. He blamed “activist groups” lobbying advertisers for lost ad dollars.
Twitter lost $270 million in the quarter ending June 30, long before Musk took over and advertisers began to flee. It had just $2.7 billion in available cash on its balance sheet as of June 30. has announced plans to charge users $8 per month have verified accounts, and also announced deep staff cuts.
Musk’s two weeks of ownership of Twitter have been a “debacle of epic proportions,” said Dan Ives, a technology analyst at Wedbush Securities. Although it is possible that the money from the sale of Musk’s Twitter sales in the last two weeks has been used to pay for some of the short-term financing used to close the Twitter deal, it cannot be ruled out that it was necessary due to the big losses on Twitter.
“The more you get into Twitter, the more it becomes a quicksand deal,” Ives said.
This is not the best time to sell Tesla shares, which have lost 46% of their value so far this year. disappointing sales caused by problems in the supply chain. Musk received an average price of $202.52 for the Tesla shares he has sold since the Twitter deal closed, which is 10% less since he closed his deal to buy Twitter.
Tesla Stock
(TSLA) it fell 1.5% in premarket trading on Wednesday.
The company faces increasing competition in the electric vehicle market from established automakers such as Volkswagen, Ford Y general motors. And some investors have expressed concern that Musk will be too distracted by the Twitter purchase. pay enough attention to address Tesla’s problems.
“Tesla investors are exacerbated by this endless Twitter albatross,” Ives said. “Musk needs to look in the mirror and end this constant Twitter merry-go-round about the Tesla story with his focus once again on the golden boy Tesla who needs his time more than ever.”
These three most recent blocks of Tesla stock sales represent just 4% of the shares Musk owns directly through a trust, and less than 3% of his holdings if you include the options he has to buy additional shares.
Musk agreed to buy Twitter
(TWTR) in April, shortly after filings showed there was bought 73 million shares, or about a 9% stake, for $2.6 billion. The purchases made him the company’s largest shareholder.
Shortly after the deal was announced, he revealed that he had Tesla sold for $8.5 billion shares, a move seen as a first step toward raising the cash it would need to complete the Twitter purchase.
Even after Musk announced a change of heart and fought a lawsuit introduced by Twitter to force him to buy the company, he continued to sell shares of Tesla. Presentations in August showed that he had sold an additional $6.9 billion worth of Tesla shares.
Musk’s filings did not disclose the reason for those earlier stock sales. But after someone on Twitter asked him if he was done selling Tesla stock, he replied “Yes” and then pointed to the possibility of being forced to buy Twitter as the reason for those sales.
Since Musk’s previous Tesla sales, Tesla stock has divide three by one, meaning he needed to sell three times as many shares to raise the same amount of cash. But his Tesla stock holdings also tripled due to the split.
Before his interest in Twitter, Musk rarely sold Tesla stock, mostly selling the shares needed to Paying taxes when exercising stock options.
He sold a total of 15.7 million pre-split shares at the end of 2021, netting a total of $16.4 billion, because he had to exercise stock options or risk expiring. It probably ended with a tax bill of more than $10 billion. But even after paying that tax bill and the cost of exercising those options, you probably had about $5 billion left over. He may have used some of that cash to buy his initial Twitter stake.
These latest sales represent the lowest price Musk has sold Tesla stock at recently, about 30% less than his sales in April and August when adjusted for the Tesla stock split since then, and 42% less than his sales in April and August. that he received when he sold shares at the end of 2021.
– Clare Duffy and Catherine Thorbecke of CNN Business contributed to this report
