- According to regulatory filings that came out Tuesday night after US markets closed, Tesla’s CEO sold about USD 7.92 Million shares on August 5.
- With the current sale, the total stock sales by Musk stand at USD 32 billion in less than one year.
Elon Musk completed the largest sale ever completed by a billionaire, the sale of USD 6.9 Billion worth of stock in Tesla Inc. Musk stated that he wanted to avoid a last-minute selloff of the electric-car maker’s shares if he would have gone ahead with his abandoned plan to purchase Twitter Inc.
According to regulatory filings filed after the closure of US markets, Tesla’s CEO sold about USD 7.92 Million shares on August 5. As people tried to figure out why Musk sold the stock, he said in a series of late-night tweets that he didn’t want to sell stock quickly if he had to complete the USD 44 Billion takeover of Twitter.
When asked Musk if he was done selling Tesla shares and if he would repurchase Tesla stock if the deal didn’t go through. Musk said, “Yes.”
The sale comes just four months after Musk sold USD 8.5 Billion worth of stock in April and said he had no plans to sell more shares in the near future. Since then, Tesla’s shares have come back from the lows they hit in May, thanks to gains in US stocks.
Charu Chanana, strategist at Saxo Capital Markets Pte in Singapore, said, “He certainly is clarifying that he is cashing up for Twitter.” “The timing of the sale – just ahead of the US CPI release – does say something, though. The bear market rally has started to falter, and further repricing of Fed expectations could mean more pain for equities ahead, especially in tech.”
With the current sale, the total stock sales by Musk stand at USD 32 billion in less than one year. Also, the firm’s shares have risen about 35% from this year’s lows. They are still down about 20% this year.
Since Musk’s surprise offer to buy Twitter earlier this year, Tesla’s stock price has been tied to how well the deal does.
Musk tweeted over the weekend that if Twitter shows how it picks accounts to find out the number of bots on its platform and how they know they are authentic, “the deal should proceed on original terms.”
If there is a specific situation wherein the Twitter deal falls apart, the party that broke the agreement would have to pay a USD 1 billion fee to get out of it.
Gene Munster, the managing partner of Loup Ventures, said that there was a 75% chance that Musk would buy Twitter before he tweeted the reason for the sale.
Munster said he was shocked. “This is going to be a headwind for Tesla in the near term. In the long term, all that matters is deliveries and gross margin.”
According to the Bloomberg Billionaires Index, Musk’s wealth of USD 250.2 billion is the world’s most extraordinary. However, his wealth has dropped by about USD 20 Billion this year as Tesla shares have gone down.
Last week, the carmaker’s shareholders agreed to a three-for-one stock split. This attracted even more retail investors now that the shares had gone up. The fact that Tesla’s earnings for the second quarter were better than expected and that the US passed a landmark climate change law that aims to increase the use of clean energy by giving tax breaks, has helped the company.