Elon Musk has sold one other tranche of Tesla shares, this time price $3.6 billion, amid ongoing chaos related to his Twitter takeover. The sale was announced in a Form 4 filing with the SEC on Wednesday night.
The sale represents almost 22 million shares of TSLA sold over the course of the last three trading days, at share prices between $156–$176. TSLA stock has fallen about 20 points in that point period, losing greater than 10% of its value.
This drop has resulted in Musk losing his title as world’s richest man, a title he had first obtained in early 2021. He was supplanted by Bernard Arnault, the CEO of luxury goods conglomerate LVMH.
Yesterday Musk took to Twitter to reassure Tesla shareholders that they’d “profit long run” from his Twitter ownership. We now know that, on the time, he was currently within the technique of offloading tens of thousands and thousands of shares.
This shouldn’t be the primary time Musk has sold TSLA shares since he first announced his bid to take over Twitter. The primary was last December after running a Twitter poll about whether he should buy the corporate or not, after which he claimed to have sold roughly enough of his stake in Tesla to fund the acquisition.
But that’s not the one time he said he was done selling Tesla stock related to the Twitter acquisition. In August, we reported on him selling $6.9 billion in stock, after which he explicitly said “yes” when asked if he was “done selling.”
Musk then went on to sell one other $3.9 billion in stock this November, after each of those pronouncements. He told Twitter employees in an all-hands meeting that this was mandatory to “save” the location.
Today’s sale is Musk’s fourth major sale of Tesla stock related to the acquisition, now totaling not less than $16 billion price. Musk purchased Twitter for $44 billion, though he did gain additional funding in the shape of loans from outside sources. Those loans have a complete interest bill of about $1 billion yearly – a big cost for a corporation that had heretofore lost on the order of $200 million per quarter, while it was publicly run.
While we don’t learn about Twitter’s current financial situation because it is now private, available external signs point to bother. There was a drastic dropoff in promoting revenue, with advertisers pulling ads from the platform, and desktop visits to their ad manager software dropping by as much as 85%.
Between additional costs for Twitter and dropping revenue, Musk seems to have seen the need of freeing up more funding for his latest company. While Twitter’s latest paid verification option may make up a few of that revenue, it’s unlikely to make an enormous difference in comparison with the extra debt and lack of revenue that Twitter is currently facing.
Previously, Musk had repeatedly stated that he can be the last person to sell Tesla stock.
Yesterday’s message that Tesla shareholders would “profit long run” from Musk’s Twitter ownership led us to wonder: but how? In hindsight, it perhaps had something to do with preparing shareholders for today’s large stock sale announcement.
Within the Electrek’s Take section for that article (which I encourage you all to read), Fred mentioned the echo chamber that Musk has created around himself, and that even the superfans allowed into that echo chamber are currently questioning whether Musk is fit to guide Tesla.
He actually seems distracted, spending a lot of his time on Twitter issues, and little or no on Tesla issues. And now, more Tesla stock is being sold to “throw into the Twitter dumpster fire,” as Fred so succinctly wrote. This puts downward pressure on Tesla stock, which makes it difficult to consider that the Twitter takeover helps TSLA shareholders or Tesla’s mission as an entire.
We here at Electrek are obviously fascinated by the electrical vehicle revolution, because it is one of the crucial significant ways in which we will decarbonize society. As such, we support Tesla’s mission and think that the leading company in automotive electrification must have competent leadership being attentive to the needs of the corporate.
It is obvious that this distraction is harming the corporate’s perception in the general public eye, and we would really like to see less distraction from Tesla leadership.