Elon Musk Sells Tesla Stock Worth $4 Billion

Matt Posky
by Matt Posky

Elon Musk has sold an estimated $4 billion worth of Tesla stock days this week after reaching a $44 billion deal to purchase Twitter. Regulatory filing show the CEO offloading nearly 4.5 million shares of the automaker between April 26th and the 27th.

The timing of the transaction makes the why of the situation fairly obvious. Despite the resulting political hubbub, Musk reached an agreement on April 25th to acquire Twitter. The deal was tied up with tens of billions of dollars worth of his Tesla shares to support margin loans after the executive said he could come up with $21 billion in equity. While some questioned where the funding would come from, others claimed it was obvious.

According to Bloomberg, Tesla shares have risen by 3.2 percent as of 6:30 AM on Friday in New York, prior the start of regular trading. However the company has reportedly dropped $275 billion in market value since Musk first disclosed having taken a stake in Twitter early this month.

“It’s a brutal cycle for Tesla investors to navigate and casts a shadow on the name,” Dan Ives, a Wedbush analyst with the equivalent of a buy rating on the shares, told the outlet. “The Twitter deal is becoming an albatross for Tesla’s stock.”

Perhaps momentarily. Though Tesla’s stock remains nothing short of miraculous considering its production capacity vs legacy rivals. The EV manufacturer’s market cap is still hovering around $900 billion USD while the much larger General Motors is right around $56 billion USD. Musk has also confirmed that he’s likely done dumping Tesla stock for the foreseeable future.

From Bloomberg:

Musk, 50, tweeted after the filings were released Thursday that he has “no further Tesla sales planned after today.” It’s unclear whether he might have done more than $4 billion worth of selling. The tweet could imply there were more disposals on Thursday that would have to be reported by Friday.

The Twitter deal is poised to be among the biggest leveraged buyouts in history, with Musk arranging $25.5 billion of debt and margin-loan financing from lenders including Morgan Stanley. If it were to fall apart, the party breaking up the agreement would be required to pay a termination fee of $1 billion under certain circumstances.

Twitter shares closed Thursday at $49.11, short of the $54.20 that investors will receive for each share they own under the company’s deal with Musk.

While some of the rhetoric surrounding the Tesla sale make it sound as though Musk is sacrificing the car brand to pursue the social media company, there is a smidgen of truth to those claims. The CEO has repeatedly shown that his involvement in just about any business venture has the potential to move the market and some are fearful that he wouldn’t be able to adequately oversee SpaceX, Tesla, his other companies, and now Twitter. Bloomberg even cited that the automaker was devalued after Elon asked the public whether he should reduce his stake before offloading $16 billion in shares in 2021.

But counter-arguments have been made suggesting that Tesla’s already high valuation simply hit the ceiling for what the current economy would allow. Either way, the company isn’t exactly suffering and released an earnings report earlier this month showing that it had exceeded its own sales target by delivering 310,000 vehicles from January through March of 2022 — up from 185,000 automobiles during the same period in 2021.

[Image: Naresh111/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Probert Probert on Apr 30, 2022

    Any investor who bought Tesla based on evaluating corporate performance, only to lose money because of Karen Musk's munted sh*t show of stupidity - might consider a class action suit.

    • Art Vandelay Art Vandelay on Apr 30, 2022

      Wait. You mean with the month the market has had people lost money? Who Knew? Good luck with your little lawsuit. Did Musk's words cause the market as a whole to lose 900 points yesterday? Of course Tesla is down. Just like everything else. Ask Jeff Bezos Chump.

  • Master Baiter Master Baiter on May 01, 2022

    I think Musk can turn Twitter into a trillion dollar enterprise if he cleans house of all the wokesters, and restores some modicum of fairness to determining what's allowed to be said on the platform.

    • See 1 previous
    • Art Vandelay Art Vandelay on May 03, 2022

      @conundrum lol...I know. Foilks like you just want me to pay off your student loans and be quiet. fnck off chump

  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
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