Tesla chief executive Elon Musk has sold shares worth $4 billion in the US-based electric car behemoth amid his ambitious bid to acquire social media platform Twitter. Musk, whose $44 billion bid to acquire Twitter has been accepted by the company, sold 4.4 million shares on April 26 and 27, the US Securities and Exchange Commission filing shows.
A user also highlighted on Twitter about Musk selling his stock in Tesla, with the US SEC filing data, to which Musk tweeted on Thursday, saying "no further TSLA sales planned after today". Some believe his tweet could mean he may have sold more stocks on Thursday, which will have to be reported by Friday.
Ever since the deal was signed, it was being reported that Musk would have to sell some of his shares in Tesla to fulfil the $21 billion equity commitment he guaranteed to close the $44 billion takeover deal. This, coupled with the overall bearish market amid fear of an aggressive policy stance by the Federal Reserve, can be attributed to the fall in the Tesla stock.
Elon Musk owns a 17% stake in the world's biggest and most valuable electric vehicle company. It's not the first time he trimmed his stake in the company. During the 2021-end, he had sold millions of Tesla shares worth $16 billion, which also coincided with the fall in the company share price.
Notably, Tesla stock fell 0.45% on Thursday to close at $877.51 on NASDAQ. The stock is falling consistently over the past week. Since April 4, when Musk announced he increased his Twitter stake, the Tesla stock has dropped over 23%, wiping over $275 billion off its market cap. The stock has fallen 13.50% in the past five days, while in the year-to-date period, the stock has fallen 26.86%.
Notwithstanding the recent fall in stock price, Tesla has performed well over the year. The stock has gained 29.62% in the past year. The electric car maker also reported a blockbuster first-quarter financial result recently, with an 87% year-on-year jump in revenue to $16.86 billion. Its margin jumped 32.9% and a net profit stood at $5.54 billion.
Twitter, on the other hand, gained 1.09% on Thursday to close at $49.11 on the New York Stock Exchange. Amid the stake sale and takeover talks, the company share has gained 20.69% in the past month, while 15.12% in the year-to-date period. However, the stock has not performed well in the one-year period, falling as much as 24.55%.
The world's richest man, Musk has a total net worth of $252 billion, as per Bloomberg Billionaire Index. His over net worth saw an $18.2 billion decline in the year-to-date period. However, he is sitting on a cash pile worth $3 billion only and some liquid assets, estimates show.
As per the pact with Twitter, Musk will acquire the company at $54.20 per share in cash in a transaction for $44 billion. The publicly listed firm has become one of the most leveraged buyouts. Musk has secured $25.5 billion of fully committed debt and margin loan financing from lenders and is providing around $21 billion in equity commitment. However, how Musk is going to fund this is not clear so far. The deal terms say if it falls apart the party that'll break the pact will pay $1 billion to the other.
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