Elon Musk sells $4.8 billion worth of Tesla shares ahead of Twitter purchase

Tesla CEO Elon Musk reportedly sold USD 4.8PHP 282INR 407EUR 5CNY 35 billion worth of his electric car company’s shares after the Twitter board announced its approval of the proposed acquisition of their company for USD 44PHP 2,582INR 3,729EUR 42CNY 320 billion. To be specific, 5.3 million shares of Tesla were sold at an average price of USD 905.30PHP 53,128INR 76,724EUR 862CNY 6,589, representing 3.1 percent of all the shares Tesla held outright, and less than 2 percent of his total holdings if stock options are included in the equation.

This was followed by a tweet from Musk: “No further TSLA sales planned after today.”

While reasons behind the sale were not disclosed in the filings, it could be noted that Tesla’s stock price fell by 12.2 percent since Monday, the largest fall since at least September 2020. Another observation in relation to this, according to a CNN report, would be investors’ worries that Tesla might be neglected as Musk pursues his ventures with Twitter and SpaceX, among others.

“Elon Musk should focus on Tesla and not waste time attempting to acquire and manage (Twitter),” said David Trainer, CEO of investment research firm New Constructs, “Tesla is facing significant competition in the electric vehicle space. The major automakers are catching up and are manufacturing innovative electric vehicles.”

The Economist, meanwhile, estimates that Musk would finance his Twitter deal through USD 21PHP 1,232INR 1,780EUR 20CNY 153 billion in equity and USD 12.5PHP 734INR 1,059EUR 12CNY 91 billion in loans against his shares in Tesla. To make Twitter more financially stable after purchase, however, Bloomberg reports that Musk unveiled to bankers his plans to reduce on company spending and cut jobs.

Nonetheless, Twitter stock rose to USD 51.70PHP 3,034INR 4,382EUR 49CNY 376 per share as of Monday. It has retreated to around USD 49PHP 2,876INR 4,153EUR 47CNY 357 as of writing time. To recall, Musk proposed to buy the social networking service for USD 54.20PHP 3,181INR 4,593EUR 52CNY 394 per share.