Elon Musk Sells Around $4 Billion Worth of Tesla Shares in a Bid to Buy Twitter

Following the revelations on Thursday, Musk tweeted, "No further TSLA sales planned after today".

Elon Musk has sold roughly $4 billion worth of Tesla shares, according to regulatory filings with the Securities and Exchange Commission on Thursday. The Tesla and SpaceX CEO sold approximately 4.4 million shares in his electric vehicle company, with the bulk sold on Tuesday, the same day Tesla's shares plummeted over 12 percent.

However, the company's shares bounced back on Wednesday but by only 1 percent. Speculation was rife that Musk could sell a bulk of his remaining shares in Tesla in a bid to raise the $21 billion of the total $44 billion Twitter buyout deal, which he has vowed to pay in cash.

Everything for Twitter

Twitter Elon Musk
Web screen grab

The fillings that became public on Thursday show that Musk filed a total of five Form 4s with the U.S. Securities and Exchange Commission, via his power of attorney Aaron Beckman, to cover all the 138 individual transactions made to raise $4 billion.

Following the revelations on Thursday, Musk tweeted, "No further TSLA sales planned after today". His remark was in response to a Twitter account that frequently promotes Tesla shares, products, and Musk.

Tesla logo Wikimedia Commons

The documents don't say why Musk sold his stock, something he is known to do. The funds might be used to fund his contentious intentions to buy social media site Twitter; but, $4 million appears insignificant in comparison to the $44 billion price tag.

Analysts speculated that Musk could have to sell a portion of his Twitter holdings to fund the $21 billion equity element of the deal that he personally guarantees.

What is Musk Planning?

Elon Musk
Elon Musk Instagram/ elonmusk

It comes on a day Twitter posted its first-quarter fiscal 2022 earnings, wherein the microblogging site reported revenues of $1.2 billion versus expectations of $1.23 billion. However, it surpassed earnings estimates. The electric carmaker reported adjusted earnings of 4 cents per share, outpacing estimates of 3 cents.

To be true, no one really knows what Musk is planning now with Twitter. Many believe that this could be one of its last reports as a public company after its board agreed to sell the company to Musk for $44 billion.

On the other hand, wild speculation has left Tesla suffering. It was expected that Musk would sell some portion of his remaining stake in Tesla but his next move is still not known. The electric carmaker's market value has now plummeted more than 26 percent from its all-time high attained in November last year.

Tesla Logo (Representational Picture) Wallpaper Flare

The big question is how much could Tesla's shares further tumble? The electric carmaker lost $126 billion in market cap in a single trading session on Tuesday, recording its worst single-day decline since January.

Musk owned around 173 million Tesla shares, or roughly one-sixth of the company, which has a market value just shy of $1 trillion following Tuesday's drop. He now holds roughly 169 million shares following the last offloading worth $4 billion.

Twitter shares drop after fall in user numbers
A 3D-printed Twitter logo is seen through broken glass, in this picture illustration taken February 8, 2016

Musk's Tesla holding is worth more than $150 billion, making him the world's richest person. However, he has used around $60 billion in Tesla shares as collateral for loans. Taking all these into account, Musk has lost approximately $42 billion in value over the past few months which included offloading of shares.

This is about double the equity component he guaranteed in the Twitter deal. Moreover, there is also growing concern that owning Twitter could put Musk in conflict with the Chinese government over free speech, which is an important market for Tesla and where the automaker produces a considerable number of cars.

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