Elon Musk Sells Almost USD 4 Billion of Tesla Stock After Twitter Takeover


The sale of 19.5 million shares this month in the electric-vehicle maker follows sales in April and August.

By guest author Rebecca Elliott from the Wall Street Journal.

Updated Nov. 8, 2022

Elon Musk sold almost USD 4 billion in Tesla Inc. TSLA -2.10%decrease; red down pointing triangle stock after buying Twitter Inc. for USD 44 billion.

Mr. Musk sold 19.5 million shares in Tesla Nov. 4-8, according to regulatory disclosures made public Tuesday.

The Tesla chief executive, who has become the world’s wealthiest person thanks in large part to his stake in the car company, has sold more than $19 billion of the electric-vehicle maker’s stock this year.

He said after doing so in April and in August that he wasn’t planning additional sales.

Mr. Musk late last month completed his acquisition of Twitter after agreeing in April to pay USD 54.20 for each share he didn’t already own.

Mr. Musk provided USD 33.5 billion in equity financing to pay for the deal, though he had lined up co-investors, according to disclosures. Twitter also took on
USD 13 billion in debt
as part of the takeover, in which the company went private.

Tesla didn’t immediately respond to a request for comment. Shares in the company are down more than 50 % from their peak last November. The latest stock sales leave Mr. Musk with a stake of roughly 14 % in Tesla.

It wasn’t clear what prompted Mr. Musk to sell the stock.

Mr. Musk said Friday in a tweet that Twitter had suffered “a massive drop in revenue” and was losing USD 4 million a day.

Twitter’s advertising business has seen turmoil in the early days of Mr. Musk’s ownership. Several big advertisers, among them General Mills Inc., and Oreo maker Mondelez International Inc., have paused their spending on the platform as they assess how it evolves under Mr. Musk, the Journal has reported. Mr. Musk also fired some of Twitter’s top ad executives that had close ties to buyers.

Mr. Musk, in response to advertiser concerns he might soften content moderation on Twitter, said the platform “cannot become a free-for-all hellscape, where anything can be said with no consequences!” He also said he would set up a content moderation group representing diverse viewpoints.

More recently, Mr. Musk has complained on Twitter about the pause in ad spending.

Some car companies that compete with Tesla also have pulled back on advertising on Twitter—moves some ad buyers indicated were made out of concern that data on their marketing campaigns could leak to Mr. Musk’s car company, the Journal has reported. General Motors Co., Ford Motor Co., Volkswagen AG and Stellantis NV have paused their advertising on Twitter since Mr. Musk acquired it.

Advertising has accounted for about 90 % of Twitter’s revenue.

Mr. Musk said last month on a Tesla earnings call that he and other investors were “obviously overpaying for Twitter right now.” However, he added that “the long-term potential for Twitter in my view is an order of magnitude greater than its current value.”

Mr. Musk has been trying to move quickly to revamp Twitter, initiating layoffs of about half the company’s staff last week. He also is moving to increase the price of a subscription service called Twitter Blue to $7.99 a month, from $4.99, in a bid to make the company less reliant on digital ad revenue. But the rollout suffered a setback in recent days as the promised software update to let some subscribers buy blue check marks for their accounts failed to materialize for most users.

The debt Twitter is taking on could mean that the company must pay more than USD 1 billion in additional annual interest payments. Twitter has reported average annual earnings before interest, taxes, depreciation and amortization of about USD 700 million over the past five years.

Mr. Musk has been on somewhat of a stock-selling spree over the past year. In addition to this year’s sales, he sold more than USD 16 billion of Tesla shares in November and December 2021. Much of that was earmarked to cover taxes associated with exercising vested stock options that would have expired this year.

Appeared in the November 9, 2022, print edition as ‘Musk Sold USD 4 Billion of Tesla Shares After Twitter Purchase’.