Alex Bruno
US securities filings on Thursday revealed that Tesla Inc. CEO Elon Musk sold $4 billion worth of the electric car maker’s shares, transactions that were probably intended to help fund his planned acquisition of Twitter Inc. Tesla CEO Elon Musk announced in a tweet that “no additional TSLA sales are planned after today.” On Tuesday and Wednesday, the business’s records show that he sold 4.4 million shares of stock, which represents a 2.6 percent ownership in the company.
For $44 billion cash, Musk bought Twitter on Monday, transferring ownership of the social media network to the world’s wealthiest person. Twitter has more than 330 million active users, many of whom are world leaders. According to Forbes, Elon Musk has a net worth of $268 billion. As part of the agreement, Musk said that he will contribute $21 billion in stock. How he plans to finance the remaining equity financing of $17 billion is unclear.
Musk has a 43.61 percent ownership in SpaceX, an unlisted rocket business worth at an estimated $100 billion, which he founded in 2005. People familiar with the subject tell Reuters that Tesla CEO Elon Musk has been seeking for partners to lower his equity stake to the acquisition, but it’s unclear if any of them have emerged. Since he sold $16.4 billion worth of Tesla stock in November and December after polling Twitter followers about selling 10% of his ownership in the electric vehicle company, this is his first Tesla stock transaction.
Due to the exercise of stock options expected to expire this year, Tesla CEO Elon Musk expects to pay more than $11 billion in taxes in 2021. Some investors have expressed concern this week that Tesla CEO Elon Musk may not have enough cash on hand to make his $21 billion cash commitment to Twitter, which would have a negative impact on the company’s stock price.
Tesla’s stock price dropped by over 20% after Musk revealed on April 4 that he owned over 9% of Twitter. In order to pay his stock contribution to the takeover effort, investors are worried that Musk will have to sell Tesla shares he holds personally. Elon Musk also took out a $12.5 billion margin debt linked to his Tesla equity as part of the agreement with Twitter. He had previously taken out loans secured by around half of his Tesla stock.
Source: NDTV
