by
New York
Cnn
—
Elon Musk just sold another 22 million shares of Tesla, raising $3.6 billion.
Musk sold the stock on Monday, Tuesday and Wednesday of this week. The sales were disclosed in an SEC filing late Wednesday.
Musk did not disclose the reason for the sales in the filing. It’s his first sale of Tesla stock since early November, when he sold 19.5 million shares shortly after closing the Twitter purchase.
Before Musk began his efforts to buy Twitter, he rarely sold Tesla stock. Typically his sales of him were tied to what he needed to sell to pay the taxes owed on the exercise of options.
But since first announcing plans to buy Twitter in April, he has sold $22.9 billion worth of Tesla stock.
Those stock sales and the amount of his attention that has focused on Twitter have Tesla shareholders and analysts worried.
“Twitter nightmare continues as Musk uses Tesla as his ATM to keep funding red ink on Twitter, which gets worse by the day as more advertisers flee the platform amid rising controversy led by Musk,” wrote Dan Ives, an analyst at Wedbush Securities. , in a note early Wednesday. “When does it end? This remains the Tesla story concern as Musk managed to change Tesla’s narrative from the foundational story of EV transformation to a ‘fundraiser’ funding the Twitter turnaround that we believe the acquisition will become most overpaid technology in the history of M&A and remains a train wreck situation.”
Musk’s sales this week represent just under 5% of the Tesla shares he held outright.
Even with these latest sales, he owns 423.6 million shares of Tesla through a trust he controls, worth about $69 billion based on the average sale price he received this week, and has options to buy nearly 279 million. more shares, valued at nearly $39 billion after the strike price is paid. He is likely to get even more options early next year after Tesla’s next financial results are reported.
But the value of those shares is steadily declining. Tesla shares are down 55% so far this year. The decline in the value of Tesla shares is a major reason why he recently lost the title of richest person on the planet.
Ives told CNN that it’s possible Musk is using funds from Tesla stock sales to cover losses on Twitter or to pay off loans or other investors he used to finance his $44 billion purchase. Nor would that be good news for Twitter or Tesla, he said she. Ives said Tesla’s board of directors, made up of Musk fans, may need to put some boundaries on him.
“Musk is the heart and lungs of Tesla, but his focus is solely on Twitter, and that and selling stock on an ongoing basis is not a good combination for Tesla,” Ives said. “While 20% of the drop in Tesla’s stock is due to concerns about demand and growing competition for EVs, 80% is due to its attention on Twitter. Twitter needs a CEO other than Musk.”
Tesla stock (TSLA) fell 1% in premarket trading.
