Elon Musk has sold $32 billion worth of Tesla stock since November

In his latest move, Musk has sold another $6.9 billion of Tesla shares.
Ameya Paleja
  • Withdrawing his Twitter offer has attracted legal troubles for Elon Musk.
  • The court can force him to pay as per his original offer.
  • Musk's equity partners may not have been keen on the acquisition.

Tesla CEO Elon Musk has sold off $32 billion worth of stock n his electric vehicle (EV) firm since November last year, Bloomberg has reported. His latest sale came earlier this month after the CEO had claimed in April that he did not plan to offload any more Tesla shares.

2021 was a great year for Musk. His companies Tesla and SpaceX did exceptionally well and took him to the top of the world's richest person's list. Last year, Musk was busy taking polls on Twitter about selling off Tesla stock so that he could become liable for paying taxes. In less than a year, Musk found himself on the back foot, trying to raise some money in case he loses the legal battle and is forced to complete the purchase at the price he first revealed.

Why is Elon Musk is selling Tesla stock now?

Since January this year, Musk had been buying Twitter stock almost on a daily basis. When his stake reached a little over nine percent, Musk announced his intention to buy out the social media company and take it private to "unlock its true potential."

Musk, who was keen on making sweeping changes at Twitter, had put together a team of 19 partners that included venture capitalists as well as cryptocurrency firm, Binance, which was ready to fund the purchase for equity. However, Musk later put the deal on hold, citing misleading numbers on how Twitter arrived at its bot/ spam account numbers. Many viewed this as Musk's attempt to eke out a discount on the offer that he made just a few months ago.

With neither Twitter nor Musk budging from their stance, the Tesla CEO declared that he was walking away from the deal while Twitter launched a legal challenge against his move.

The court battle will be played out in the month of October, where Musk may be forced to complete the purchase at his offered price. However, Musk feels that some of his equity partners may not come through, although he did not specify which ones. The recent sale is to prevent an emergency sale of Tesla stock in the future if the court does not agree with Musk's reasons to back off from the deal.

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What happens next?

According to the filings with the Securities and Exchange Commission, (SEC) Musk has offloaded 7.92 million shares worth $6.9 billion on August 5, taking his tally to worth $32 billion since November last year. However, financial experts think that Musk may not be done offloading his stock and is using the bullish run of Tesla stock to raise some funds.

Tesla stock that has spiraled downward after Musk announced his decision to purchase Twitter has now bounced back up after Musk backed off from the deal. The financial plan Musk had announced while expressing his interest in the social media company involved the sale of his Tesla stake and a margin loan he would take with the stock he owned.

With uncertainities looming over which way the court decision will go, Musk needs to be prepared with the funds if it comes to that. However, there is also another reason why Musk may need the funds. There is a sliver of a chance that Musk and Twitter can agree on spam/ bit account numbers and the deal progressing on the original terms, as Musk said in this tweet.

In case it does not, Musk can simply buy back the Tesla shares at a later point or even use the funds to start his own social media company, X.com, CNBC said in its report.