Elon Musk sold about $4 billion worth of Tesla Inc. shares after announcing one of the biggest LBO backed acquisition of Twitter Inc.
Elon offloaded about 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 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 been the largest shareholder. Meanwhile, confirmation of his sales may unnerve shareholders, scores of whom are retail investors.
Tesla shares fell 12% on April 26, the most since September 2020, and were little changed in the following two sessions, with the stock closing Thursday at $877.51. Another $12.5 billion of Musk’s deal for Twitter is secured by his Tesla stake.
“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.”
