According to Forbes, Elon Musk is the richest person in the world. But most of his wealth is wrapped in Tesla stock.
To buy Twitter for $44 billion — a deal he’s now trying to avoid in court — Musk obtained loans from various banks and raised money from investors. (Originally, the deal included loans on Tesla stock.)
As for his net worth, the billionaire didn’t have the cash to buy Twitter. But over the past year, Musk has sold nearly $32.8 billion worth of Tesla stock, according to disclosures from the U.S. Securities and Exchange Commission (SEC), including a $6.9 billion liquidation just this week.
“No more TSLA sales planned after today”
On August 9, Musk disclosed the sale of 7.9 million shares of Tesla stock for $6.9 billion, roughly 5% of his total position. The sale reduced Musk’s ownership in Tesla to just under 15%, though he is still the largest shareholder by a wide margin (According to FactSet data, Vanguard Group owns the next largest stake, with about 6%. )
This latest stock dump isn’t an isolated incident: Musk has spent the past year largely in sell mode. Musk has given up about $33 billion worth of Tesla stock, making acquisitions worth about $24 billion over the same period.
On April 28, after Musk sold $8.5 billion in Tesla stock, he pledged to close the sale, telling his Twitter followers, “No further TSLA sales planned after today.”
But Musk reneged on that promise within a few months.
Why is Elon selling?
After Musk’s most recent stock sale was revealed, Tesla investor Sawyer Merritt asked Musk if he had done the sale. Once again Musk replied, “Yes.”
“In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come, it’s important to avoid an emergency sale of Tesla stock.” Musk told another Twitter user that he would buy more shares in Tesla if he successfully exits the Twitter sale.
On the first day after the news was announced, both Twitter and Tesla’s stock were up about 3% in trading today. In a tweet, Wedbush Securities analyst Daniel Ives called Musk’s attempt to end the deal a “poker trick” and Wedbush. Twitter raises price target From $30 to $50, just shy of the agreed-upon price per share at $54.20. That change accounts for the possibility that the deal will close — either by Twitter winning in court this autumn, or an out-of-court settlement by the two parties.
Greg Martin, co-founder of investment firm Rainmaker Securities, said in an email to Quartz that Musk’s sale came at an opportune time. Not only does Twitter have the upper hand in court, but Tesla stock is up 25% this month thanks to Senate passage of the Inflation Reduction Act, which promises tax credits for electric vehicle purchases. Is.