Elon Musk, the CEO of Tesla, sold 4.4 million Tesla shares which are worth USD 3.99 billion on Thursday. The sale took place as Musk raises funding to complete his purchase of Twitter. According to Insider Aaron Weinman, Musk needs to utilize his Tesla stock to obtain $21 billion in equity to fund his buyout of Twitter. As per the story, $13 billion will come from debt, with another $12.5 billion coming from a margin loan secured by his Tesla shares.
Musk has made an offer to purchase Twitter for USD 44 billion. Market observers are keeping a careful eye on Musk’s actions for any indication that he would withdraw his offer to buy. He has been known to take a step back after making major announcements in the past. He declined to join Twitter’s board of directors at the last minute earlier this month. Musk announced his intention to take Tesla private in 2018. He even claimed to have “funding secured” for a deal of USD 72 billion. However, he did not accept the offer.
Tesla shares
“No further Tesla sales planned after today,” Musk tweeted. Since Musk revealed a 9.2 percent investment in the social networking platform on April 4, Tesla’s market value has been declining. The electric carmaker’s stock dropped 13% on April 26. Tesla’s stock closed at $877.51 a share on Thursday, before the filings about Musk’s stake sale became public.
Twitter shares rose on Thursday after the company posted mixed earnings. Shares of the microblogging company were trading at $49.18 at 18:50 GMT, up 1.1 percent from Wednesday but still significantly below the $54.20 price agreed upon by Twitter and Musk. According to a regulatory filing, if Musk fails to gather enough funds to complete his purchase, he will have to pay Twitter a $1 billion termination fee.