Elon Musk sold $4 billion worth of Tesla stock following the Twitter acquisition
Days after agreeing to acquire Twitter for his initial offer of $44 billion, Elon Musk sold off Tesla stock worth nearly $4 billion in the days between November 4 and November 8, the Wall Street Journal reported.
Last year, Musk became the world's richest person riding on the stock value of his electric car-making company, Tesla. At its peak price of $410 a piece, Musk's personal worth reached a never-before figure of $340 billion last year. As we turned into the new year, Tesla stock started shedding the rapid gains, and as 2022 draws to a close, it is now down 45 percent, a Bloomberg report said.
This is far higher than the 19 percent drop that the S&P 500 Index has witnessed this year and even worse than the 32 percent drop seen by the Nasdaq 100 Index, which hosts a lot of technology stocks.
Musk offloads more Tesla stock
Earlier this year, Interesting Engineering reported that Elon Musk was looking at his Tesla stock price as a way to finance his Twitter interest. Musk did so on two occasions, once in April and the other in August, and had even gone on record that he did not plan to sell more of his holding in the EV maker.
However, as regulatory filings on Tuesday revealed, Musk sold 19.8 million shares this month at a rate that would fetch him nearly $4 billion in cash. The move comes shortly after Musk completed his Twitter acquisition, and reports have emerged that the social media company's loan interest repayments now stand at a billion dollars a year.
Musk, who has brought in a flurry of changes at Twitter, is looking for means to bring in more revenues and may have to finance the functioning of the company, which makes an average of $700 million a year. There has been no official statement on why Musk has sold his stock, which has also brought down his stake in Tesla to about 14 percent now.
Tesla is in a tight spot
Although Musk must have been well aware of how tough the going would be at Twitter, given its financial conditions, he probably wasn't expecting Tesla to be in a tight spot at the same time.
Musk has been warning the world about an imminent recession and even planned layoffs at Tesla to keep things under control. However, the company seems to be struggling in its second-largest market, China, where it had to shut down the flagship showroom in the capital city of Beijing.
Sales in the region missed analyst estimates, and Musk acknowledged the issues in the market in a call with analysts, Bloomberg said in its report. Tesla stock price has now dwindled to $186.75 as of Tuesday and, amidst fears of a recession, could also dip further. Musk-led Tesla, however, plans to keep up the pace of production of its EVs in spite of the slowdown concerns.
Why did Musk offload these shares remains unclear.