Tech

Elon Musk sells Tesla shares worth $ 8.5 billion before Twitter takeover


Tesla CEO Elon Musk has sold $ 8.5 billion (approximately Rs. 65,044 crore)’s shares in the electric vehicle maker, U.S. security requests showed, in sales likely to be aimed at his planned purchase of Twitter help finance.

Musk said in a tweet on Thursday that “no further TSLA sales are planned after today”. It sold about 9.6 million shares this week, according to applications on Thursday and Friday, which equates to 5.6 percent of its stake in the company.

It was not clear whether all of Musk’s recent Tesla share sales were reported. Tesla did not immediately respond to a Reuters request for comment.

The sale came after Musk on Monday reached an agreement to buy Twitter for $ 44 billion (approximately Rs. 3,36,690 crore) in cash in a deal that controls the social media platform populated by millions of users and world leaders to the world’s richest person. Musk’s net worth is $ 268 billion (about Rs. 20,50,725 crore), according to Forbes.

As part of the deal, Musk said it would provide a $ 21 billion (approximately Rs. 1,60,690 crore) equity commitment.

It was not immediately clear how the billionaire would raise the remaining $ 12.5 billion (approximately Rs. 95,600 crore) from equity financing. Musk holds a 43.61 percent stake in unlisted rocket company SpaceX, which is valued at $ 100 billion (approximately Rs. 7.65,230 crore).

Tesla shares rose about 5 percent in morning trading on Friday. They have tumbled about 20 percent since Musk’s announcement of a more than 9 percent stake in Twitter on April 4.

Musk was looking for partners to reduce its share contribution to the deal, a person familiar with the matter told Reuters, adding that it is far from certain that such a partner will emerge.

This is his first Tesla share sale since he dropped $ 16.4 billion (about Rs 1 25,500 crore) in November and December after tweeting to Twitter users about selling 10 percent of his stake in the maker of electric motors.

Musk said on Twitter that he would pay more than $ 11 billion (approximately Rs. 84,140 crore) in taxes in 2021 due to his exercise of stock options expiring this year.

Some traders worried this week that Musk may not have enough money to finance his $ 21 billion (approximately Rs. 1,60,690 crore) cash contribution and could walk away from the deal and weigh in on Twitter shares.

As part of the Twitter financing agreement, Musk secured liabilities for $ 13 billion (approximately Rs. 99,480 crore) in loans secured against Twitter and a $ 12.5 billion margin loan linked to its Tesla share.

© Thomson Reuters 2022


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