Business & Economy
What Elon Musk Promised After Selling Millions of Tesla Shares
Billionaire and Tesla CEO,Elon Musk is in the process of acquiring microblogging website Twitter for $44 billion.
It’s a promise that will delight Tesla (TSLA) – Get Tesla Inc Report fans and investors.
After days of wondering about their hero Elon Musk’s intentions regarding Tesla, they can now breathe. The Tech tycoon, whose energy has been devoted since the beginning of April on Twitter (TWTR) – Get Twitter, Inc. Report, has just made a big commitment. He just promised he doesn’t plan to sell Tesla stock after recent trades.
“No further TSLA sales planned after today,” the billionaire wrote on Twitter on April 28, in response to a post from the account Whole Mars Catalog, indicating that Musk had just sold some of his 173 million Tesla shares.
This commitment is important because it came at a time when the serial entrepreneur reached an agreement in principle with the management of Twitter to acquire the social network at a price of $54.20 per share for a transaction valued at $44 billion. Musk promised to take Twitter private once the deal was finalized.
Musk Sold 4.4 million Tesla Shares for $4 Billion
For days, Tesla investors and the financial community alike wondered how Musk was planning to finance the operation. Certainly his fortune is estimated at $252 billion, according to Bloomberg Billionaires Index, but it is not liquid. His net wealth is based on his Tesla shares and his stake in aerospace company SpaceX.
Musk has managed to secure $25.5 billion of debt and margin loan financing and is providing a $21 billion equity commitment. This latest part of the transaction that he’s personally guaranteed suggested that he could sell Tesla shares.
It is done. The world’s richest man sold 4.4 million Tesla shares on April 26, according to a document filed with the Securities and Exchange Commission late Thursday. This document shows that Musk made the sale in 30 separate transactions with price ranging from $904 to $933.63. In total, it raised nearly $4 billion, according to TheStreet’s calculations.
On April 26, Tesla shares closed down 12.18% at $876.42. Since then,Tesla shares have remained almost stable. They closed at $877.51 on April 28.
Musk’s commitment suggests he will once again focus on Tesla, which he’s been walking away from for weeks now despite strong first-quarter results.
“Tesla shareholders are voicing concern over Elon [Musk] doing too many things at once,” Scott Sheridan, market expert, and CEO of niche investment brokerage firm Tastyworks. “And shareholders may also be worrying that depending on what he does with Twitter, he may turn off potential car buyers.”
Musk is involved with several companies, which rely on him to establish themselves in their respective sectors. Besides Tesla, he is the CEO of SpaceX, at the helm at Neuralink and The Boring Company.
But Tesla is Musk’s favorite. The tech tycoon is the architect of the success of the group which was still on the verge of bankruptcy in 2019 when it had difficulty ensuring the production ramp-up of the Model 3, the entry-level vehicle.
The automaker currently faces a cocktail of negative factors like the entire automotive sector: supply chains are disrupted by the pandemic, the chip shortage continues, and soaring prices of raw materials, such as nickel — important for batteries — are not going anywhere. China, for example, has imposed the lockdown on Shanghai since the end of March. Tesla’s factory in Shanghai serves the local market, Asia and Europe as well.
