Elon Musk unloads $8.4 billion of Tesla stock to finance Twitter takeover

Elon Musk sold around $8.4 billion worth of his shares in Tesla this week as he seeks to line up the money to buy Twitter, according to filings with the US Securities and Exchange Commission. But the billionaire claims he won’t sell any more Tesla stock “after today.”

Musk sold the bulk of his shares on Tuesday and Wednesday, offloading 4.4 million shares, the filings show. He sold another 5.2 million shares on Thursday, after which he tweeted, “No further TSLA sales planned after today.”

Tesla’s share price plummeted 12 percent on Tuesday and has since inched up higher. The stock was up about 3.9 percent on Friday.

On April 25th, Twitter’s board of directors accepted Musk’s offer of $54.20 per share, or $44 billion, for total control of the company. It was the same price he named in his initial offer on April 14th. Upon completion of the transaction, Twitter will become a private company. The deal still requires shareholder and regulatory approval.

In order to fund the deal, Musk has promised to secure $25.5 billion of fully committed debt, including $12.5 billion in loans against his Tesla stock. Notably, Musk does not list any equity partners with which to share the cash burden. The Tesla CEO already owns a 9 percent stake in Twitter, valued at roughly $2.9 billion.

Tesla’s shares have lost around 20 percent of their value since Musk revealed his initial stake in Twitter, raising questions from investors about the unintended consequences for his electric car company.

“I think for Tesla shareholders, the Twitter news comes at a not ideal time, because there’s so many important targets and milestones for Tesla over the next six, nine, twelve months,” Wedbush Securities analyst Daniel Ives told The Verge. He cited the long-delayed Cybertruck, Tesla’s new 4680 battery packs, the continued buildout of the Gigafactories in Germany and Texas, and the recent reopening of the company’s factory in China.

“It just adds another variable in a jittery market,” Ives added. “It’s definitely caused angst on the Street.”

Musk is Tesla’s biggest shareholder, owning around 17 percent of the company’s shares, or about 175 million shares in total. Musk has sold large batches of shares before. Last year, he sold 15 million shares, worth more than $16 billion, after polling his followers on Twitter. The carmaker’s shares plunged 16 percent the following two trading days.

Tesla has a famously volatile stock, but Tuesday’s 12 percent drop was its worst daily decline since September 2020, when it lost around 21 percent of its value, according to The New York Times. Some investors, including Musk himself, have suggested that Tesla’s share price is overvalued. The company’s market cap has moved well beyond $1 trillion.

Other analysts cited the splitting of Musk’s attention as a potential downside of his Twitter offer. In addition to Tesla, Musk also serves as CEO of SpaceX, the Boring Company, and Neuralink.

In its most recent quarterly earnings report, Tesla cites Musk splitting his time with his other companies as a potential risk factor. “We are highly dependent on the services of Elon Musk, Technoking of Tesla and our Chief Executive Officer,” the company states. “Although Mr. Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla.”