Elon Musk Offloads $4 Billion of Tesla Shares, Pledges No More Sales

(Bloomberg) — Elon Musk sold about $4 billion worth of Tesla Inc. stock after clinching a blockbuster $44 billion deal to buy Twitter Inc.

Most Read from Bloomberg

Tesla’s chief executive officer offloaded 4.4 million shares on April 26 and April 27, filings showed late Thursday. Wall Street analysts and investors in the electric carmaker suspected that Musk may need to sell some stock to cover the $21 billion equity portion of the transaction that he’s personally guaranteed.

Musk tweeted shortly after the filings were made public that he has “no further Tesla sales planned after today.”

The billionaire and Twitter reached an agreement on Monday for the world’s richest man to buy the social-media company. His quest raises several “key man risk” issues for Tesla, where Musk has been CEO since 2008 and has long had the largest stake. Meanwhile, confirmation of his sales may unnerve shareholders, scores of whom are retail investors.

“It’s a brutal cycle for Tesla investors to navigate and casts a shadow on the name with Musk selling more stock,” said Dan Ives of Wedbush. “The Twitter deal is becoming an albatross for Tesla’s stock and this pours gasoline on the raging fire.”

Tesla shares fell the most since September 2020 on April 26, the day Musk did most of the selling. They were little changed in the next two sessions and closed at $877.51 on Thursday.

It’s not clear if Musk is done offloading Tesla shares as his tweet could imply he sold more stock on Thursday, which would have to be reported by Friday.

The Twitter deal is poised to be one of the biggest leveraged buyouts in history, with Musk securing $25.5 billion of debt and margin-loan financing from lenders including Morgan Stanley. If it falls apart, the party breaking up the agreement will be required to pay a termination fee of $1 billion under certain circumstances.

Twitter shares closed Thursday at $49.11, short of the $54.20 that investors will receive for each share they own under the company’s deal with Musk.

Musk offloaded millions of Tesla shares worth more than $16 billion toward the end of 2021, his first sales in more than five years. They started in November after he asked his army of Twitter followers whether he should trim his stake in the carmaker and coincided with a drop in the stock.

With a $252.2 billion fortune, Musk is the world’s richest person, according to the Bloomberg Billionaires Index. But the recent slump in Tesla shares has shaved off $18 billion from his net worth this year, even as the carmaker reported better-than-expected earnings earlier this month.

(Updates to add context started in seventh paragraph)