Elon Musk Tesla Share Sale: Billionaire Sells $3.95 bn Stock After Buying Twitter
Tesla Inc. Chief Executive Officer 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.
Tesla shares gained 0.8% during pre-market trading in New York on Wednesday.
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
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