Tech tycoon Elon Musk has sold more than 20 million shares of his flagship company Tesla to raise about $3.5 billion. Musk, who has dominated headlines more most part of 2022 owing to his controversial takeover of Twitter did not give a reason for the share sale. Musk had sold shares in the leading electric car maker at various tranches since November 2021. The overall value of the Tesla share sale by Musk since then stands at around $40 billion.
According to a Tesla filing at the US Securities and Exchange Commission (SEC) following the latest share sale filed with, Musk's shares in Tesla are now worth about $66 billion.
Increasing Interest Commitments?
According to analysts, the latest stock selloff is driven by Musk's increasing interest commitments arising from the expensive Twitter acquisition. As per an IANS report, Twitter had taken on $13 billion in debt including about $3 billion of unsecured debt on which the company is paying interest at the rate of 11.75 percent.
Musk, who has long been the world's richest man, has seen an erosion in his wealth since the fractious $44 billion takeover of microblogging site Twitter. According to reports Musk has suffered a $100 billion drop in his wealth in the current year so far, which resulted in him losing the top wealth tag to French businessman Bernard Arnault.
According to Forbes, Musk's personal worth is not about $174 billion, lower than Arnault's fortune of $191 billion.
Sliding Tesla Stock
Musk's latest share sale in Tesla is seen to be affecting the blue chip tech stock further. Tesla has seen more than 50 percent erosion in value in 2022. As of Wednesday, the value of Tesla shares on Nasdaq index stood at below $500 billion, compared with more than $1 trillion a year ago.
In November this year, Elon Musk sold Tesla stock worth about $4 billion. The sale happened a week after he completed the $44 billion deal to buy Twitter and privatize the microblogging platform. The Tesla Chief Executive Officer sold some 19.5 million shares of the electric vehicle company, according to regulatory filings in New York.
Bad Finances at Twitter
There were speculations that the bad finances at Twitter may have been the reason why Musk was selling off shares in Tesla. Most of the analysts agree that Musk's decision to sell more Tesla shares means that he is gearing up to face a tough time running Twitter. "It looks like Musk is preparing for things to stay bad at Twitter for the next year ... He's preparing for Twitter to be a money hole," Gene Munster of Loup Ventures said, according to Bloomberg.
Earlier this year, in April, Musk sold off $8.5 billion worth of Tesla stock. Again in August, he offloaded another $7 billion worth of Tesla shares.
The latest share sale comes at a time when there are increasing concerns from Tesla investors about the future of the company as Musk spends so much time running Twitter. Tesla stock has already lost about 60 percent since January 2022. The stock closed $156.80 on Wednesday.