Musk sells $8.5 billion in Tesla stock as he prepares to buy Twitter


Three days after Elon Musk devised a deal to buy Twitter, he sold nearly $8.5 billion worth of shares in Tesla to help finance the acquisition.

Musk reported 9.6 million share sales in filings with the Securities and Exchange Commission on Thursday and Friday. Transactions were made at prices ranging from $822.68 to $999.13 per share.

The richest man in the world, who is the CEO of Tesla, tweeted on Thursday night that he is not planning any further sales of the company’s shares.

Kevin Kaiser, a finance professor at the Wharton School at the University of Pennsylvania, said that Musk’s stock sale meant the Twitter deal was more likely to close as it showed Musk was intent on finding the money.

San Francisco-based Twitter announced on Monday that it has agreed to be acquired by Musk for $54.20 per share, or approximately $44 billion. Analysts said the deal may worry Tesla investors that Musk will be distracted by Twitter and become less involved in running the electric car company and have to sell a large number of Tesla shares to fund the acquisition. Musk is Tesla’s largest shareholder.

On Tuesday, Tesla shares closed 12%, the biggest single-day drop since September 8, 2020. On Friday, shares of Austin, Texas-based Tesla Inc. were going for about $884.

Kaiser said it was a “prudent” move by Musk to sell shares now, rather than closer to when the deal is expected to close.

“It makes sense to sell shares before people expect this to happen so their sales don’t put unusual short-term downward pressure on the price of Tesla’s stock,” Kaiser said.

Shareholders will have to weigh in before Musk’s Twitter deal is finalized. So do regulators in the US and countries where Twitter does business.

So far, a few hurdles are expected, despite objections from some of Twitter’s employees and users who are concerned about Musk’s stance on freedom of speech and what it might mean for harassment and hate speech on the platform.

Twitter shares rose to $49.17 and are still well below the deal price of $54.20.

Copyright © 2022 The Washington Times, LLC.


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