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Musk sells another batch of Tesla shares despite vows to stop

Nov. 9, 2022 Updated Wed., Nov. 9, 2022 at 5:36 p.m.

Elon Musk, chief executive officer of Tesla Inc., waves while departing court during the SolarCity trial in Wilmington, Del., on July 13, 2021.   (Al Drago/Bloomberg)
Elon Musk, chief executive officer of Tesla Inc., waves while departing court during the SolarCity trial in Wilmington, Del., on July 13, 2021.  (Al Drago/Bloomberg)
By Anders Melin Bloomberg

Billionaire Elon Musk unloaded another batch of Tesla shares to help fund his buyout of Twitter, bringing his sales of the electric-vehicle maker’s stock to about $36 billion in the past year.

Musk disposed of 19.5 million shares worth $3.95 billion in the latest transactions, according to regulatory filings late Tuesday in New York. The documents didn’t indicate the sales – his first since August – were pre-planned.

The filings come despite assurances from Tesla’s chief executive officer and single-largest shareholder that he was done offloading the stock. Musk claimed in April no further sales were planned, then again in August, saying it was important to avoid an “emergency sale” in cased he needed to close the Twitter acquisition and struggled to bring in additional equity partners.

Tesla shares gained less than 1% during pre-market trading in New York on Wednesday. The stock tumbled 46% this year through Tuesday’s close, and has lost $600 billion in market capitalization since peaking last November

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. It’s not fully clear how the $44 billion deal ultimately was financed, beyond the roughly $13 billion in debt commitments by 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 an emailed request for comment.

The billionaire’s drastic moves to cut costs – including firing half the staff and later asking some to come back – and overhaul of the platform’s operations have resulted in two tumultuous weeks at the social-media company, with some employees not being entirely clear on whether they are still employed there or not.

The deal has also sparked concern among some Tesla shareholders that the CEO is spreading himself too thin and would have to get rid of even more of his stock. He still owns about 14%, according to Bloomberg data.

Of the $36 billion worth of shares Musk has sold, around half of that has come since he went public with the Twitter buyout plan, data compiled by Bloomberg show. Tesla’s stock decline has dragged down Musk’s fortune to $179.5 billion from $340 billion at its height, according to the Bloomberg Billionaires Index.

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