(Bloomberg) — The CEO of Tesla Inc. Elon Musk sold at least $3.95 billion of the electric vehicle maker’s stock just days after completing his acquisition of Twitter Inc.
Most Read by Bloomberg
Musk unloaded 19.5 million shares, according to regulatory filings Tuesday in New York, his first sales since August. The documents do not show that the deals were pre-planned.
The world’s richest man swallowed the social media platform in October after spending months trying to get off it. In August, Musk said he was done offloading Tesla stock and that it was important to avoid an “emergency sale” of the stock in case he is forced to close the Twitter acquisition and struggles to attract additional equity partners.
It’s not entirely clear how the $44 billion deal was ultimately financed, other than about $13 billion in debt commitments from Wall Street banks. Several high-profile figures have pledged to invest around $7 billion, although it is not known whether all have followed through on their pledges. And Musk has never said publicly how he plans to raise his share of the money needed to close the deal.
But one thing is clear: Twitter is losing money and now faces annual interest payments of nearly $1.2 billion. Since Musk took over, several major companies have halted their ads on the platform, waiting to see how it develops under the billionaire’s leadership.
“It looks like Musk is setting himself up for things to stay bad at Twitter for the next year,” Loup Ventures’ Gene Munster said after the share sales became public. “He’s getting ready for Twitter to be a money pit.”
Musk, 51, and his financial right-hand man, Jared Birchall, did not respond to an emailed request for comment.
The billionaire’s drastic cost-cutting moves — including firing half the staff and later asking some to return — and overhauling the platform’s operations have led to a tumultuous two weeks at the social media company, with some employees not entirely clear whether they still work there or not.
The deal also raised concerns among some Tesla shareholders that the CEO was spreading himself too thin and would have to get rid of even more of his stock.
It has unloaded about $36 billion worth of stock in the automaker over the past year — about half of it since it went public with the plan to buy Twitter, data compiled by Bloomberg show. The stock is now down 53% from its peak last year, pushing Musk’s fortune to $179.5 billion from $340 billion at the peak, according to the Bloomberg Billionaires Index.
–With help from Dana Hull, Ed Ludlow, Tom Maloney and Esha Dey.
(Adds context about funding in the fourth paragraph)
Most Read by Bloomberg Businessweek
©2022 Bloomberg LP