By on April 29, 2022

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]

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13 Comments on “Elon Musk Sells Tesla Stock Worth $4 Billion...”


  • avatar
    kcflyer

    We must ask the ministry of truth to investigate at once, perhaps a joint investigation with the SEC and IRS?

  • avatar
    SoCalMikester

    best case? he figures out how to make twitter financially successful. worst case? the chuds take it over and it turns into a bubble of hate, then dies.

    • 0 avatar
      FreedMike

      “chuds take it over” should not be in future tense. Twitter is already a f**king cesspool.

      • 0 avatar
        Lou_BC

        Musk’s brand is that of a genius wonderkin with a vision to save humanity through the mass industrial application of technology. Buying Twitter goes against that vision since it’s just an echo chamber of idiocracy.

    • 0 avatar
      EBFlex

      “worst case? the chuds take it over and it turns into a bubble of hate, then dies.”

      That is what we had when Twitter was run by Dorsey as a mouthpiece for left propaganda.

  • avatar
    FreedMike

    I think you buried the lede, to wit:

    “(Tesla) 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.”

    That’s a 68% increase, in case anyone’s interested.

  • avatar

    “But counter-arguments have been made suggesting that Tesla’s already high valuation simply hit the ceiling for what the current economy would allow.”

    Oh yes, the ceiling of what the economy allows happened the exact same moment he announced his Twitter bid. That’s how that works.

  • avatar
    probert

    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.

    • 0 avatar
      Art Vandelay

      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.

  • avatar
    Master Baiter

    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.

    • 0 avatar
      conundrum

      You mean allowing all the moaning right wingers to flourish, because they claim nobody listens to their nonsense, and it’s all because they’re censored?

      When I need a lesson in anything from the right, I’ll whistle. Or hell, come to TTAC and read the brainiac utterances of folks like you and EBFlex, nonentities of the alt-right, then ask for your simplistic solutions to everything.

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