Elon Musk Sells Tesla Stock Worth $4 Billion

Matt Posky
by Matt Posky
elon musk sells tesla stock worth 4 billion

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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  • 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

  • Analoggrotto Too bad they don't sell Kia Telluride, the greatest selling vehicle in it's class over the pond in the UK who burned Washington DC down but that's ok.
  • Analoggrotto Kia Telluride never faced such problems and now offers a superior offroad trim for those times where soccerdad needs to go get the white claws from costco.
  • Zerofoo There's a joke here somewhere about Tim's used car recommendations, Tassos, and death traps.
  • Tassos Subaru really knows how to take fugly to ever higher levels, and sell every one of the (of course very few) it makes. As if the number of sales negates the fugliness.Don't hold your breath. I bet this will NOT be the vehicle James Bond arrives at the Casino in Monte Carlo with in his next flick. (if any)
  • ToolGuy Government overreach. Park the Ford in your air-conditioned garage on a maintenance charger and this won't be a problem.Here's some (old) general background if you are interested.@ILO, there are 3 Fords, and Ford Pro™ is the one with the bright future 🙂