SAN FRANCISCO (REUTERS, BLOOMBERG) - Tesla chief executive officer Elon Musk sold about US$4 billion (S$5.5 billion) worth of shares in the electric vehicle maker in a move likely aimed at helping finance his planned blockbuster purchase of Twitter for US$44 billion.
Mr Musk tweeted that he had “no further Tesla sales planned after today” shortly after the filings on the sales were made public on Thursday (April 28). He sold 4.4 million shares on Tuesday and Wednesday, according to the filings, equating to 2.6 per cent of his stake in Tesla.
Tesla shares have fallen nearly 20 per cent since Mr Musk disclosed his over 9 per cent stake in Twitter on April 4. Investors have expressed concern that Mr Musk may have to sell Tesla shares to fund his equity contribution to the takeover offer.
Tesla shares fell 12 per cent on April 26, the most since September 2020, and were little changed in the following two sessions, with the stock closing on Thursday at US$877.51.
“It is a brutal cycle for Tesla investors to navigate and casts a shadow on the name with Musk selling more stock,” said Mr Dan Ives of Wedbush Securities. “The Twitter deal is becoming an albatross for Tesla’s stock and this pours gasoline on the raging fire.”
The sale came after Mr Musk on Monday clinched a deal to buy Twitter in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person. Mr Musk’s net worth is US$268 billion, according to Forbes.
As part of the Twitter deal, Mr Musk said he would provide a US$21 billion equity commitment.
It is not clear how he will cover the remaining US$17 billion of equity financing. Mr Musk holds a 43.61 per cent stake in unlisted rocket company SpaceX that is reportedly valued at US$100 billion.
Mr Musk also took out a US$12.5 billion margin loan tied to his Tesla stock for the Twitter deal. He had already borrowed against around half of his Tesla shares.
The Tesla CEO has been looking for partners to reduce his equity contribution to the deal, a person familiar with the matter told Reuters, adding that it is far from certain such a partner will emerge.
This is his first Tesla stock sale since he offloaded US$16.4 billion worth of shares in November and December after polling Twitter users about selling 10 per cent of his stake in the electric car maker.
Mr Musk also said on Twitter that he would pay more than US$11 billion in taxes in 2021 due to his exercise of stock options set to expire this year.
Some traders have fretted this week that Mr Musk may not have enough money sitting around to fund his US$21 billion cash contribution and could walk away from the deal, weighing on Twitter shares.
Twitter shares closed on Thursday at US$49.11, short of the US$54.20 that investors will receive for each share they own under the company’s deal with Mr Musk.
