California: Tesla Inc. CEO Elon Musk sold at least $3.95 billion of the electric-vehicle maker’s shares just days after closing his buyout of Twitter Inc.
Musk unloaded 19.5 million shares, according to regulatory filings on Tuesday in New York, his first disposals since August. The documents didn’t indicate that the transactions were pre-planned.
The world’s richest person followed through with his takeover of the social-media platform in October, after spending months trying to get out of it. In August, Musk had said he was done offloading Tesla stock and that it was important to avoid an “emergency sale” of the shares in case he was forced to close the Twitter acquisition and struggled to bring in additional equity partners.
It’s not fully clear how the $44 billion deal ultimately was financed, beyond the roughly $13 billion of debt commitments from Wall Street banks. Several high-profile individuals promised to invest some $7 billion, though it isn’t known whether all of them stuck to their pledges. And Musk has never said publicly how he planned to gather his share of the cash needed to close the deal.
But one thing’s clear: Twitter is losing money and now faces annual interest payments of nearly $1.2 billion. Since Musk took over, several major companies have halted their ads on the platform, waiting to see how it evolves under the billionaire’s leadership.
“It looks like Musk is preparing for things to stay bad at Twitter for the next year,” said Gene Munster of Loup Ventures after the stock sales became public. “He’s preparing for Twitter to be a money hole.”
Musk, 51, and his financial right-hand man, Jared Birchall, did not respond to an emailed request for comment.
The billionaire’s drastic moves to cut costs - including firing half the staff and later asking some to come back - and overhaul of the platform’s operations have resulted in two tumultuous weeks at the social-media company, with some employees not being entirely clear on whether they are still employed there or not.
The deal has also sparked concern among some Tesla shareholders that the CEO is spreading himself too thin and would have to get rid of even more of his stock.
He’s unloaded about $36 billion worth of shares in the carmaker in the past year - around half of that since he went public with the Twitter buyout plan, data compiled by Bloomberg show. Now the stock is down 53 per cent from its peak last year, pushing Musk’s fortune to $179.5 billion from $340 billion at the high, according to the Bloomberg Billionaires Index.