Musk sells $8.5bn in Tesla stock
SAN FRANCISCO: In the three days after Elon Musk engineered a deal to buy Twitter, he sold roughly $8.5 billion worth of shares in Tesla to help fund the purchase.
Musk reported the sale of 9.6 million shares in filings with the Securities and Exchange Commission on Thursday and Friday. The trades were made at prices ranging from $822.68 to $999.13 a share.
The world’s richest man, who is the CEO of Tesla, tweeted on Thursday night that he doesn’t plan any further sales of the company’s shares.
Kevin Kaiser, a finance professor at the Wharton School at the University of Pennsylvania, said Musk’s share sale means it is more likely that the Twitter deal will close because it indicates Musk intends to come up with the money.
San Francisco-based Twitter announced on Monday that it had agreed to be bought by Musk for $ 54.20 a share, or about $44 billion. Analysts said the deal could make Tesla investors nervous that Musk will be distracted by Twitter and less engaged in running the electric car company - and have to sell a large number of Tesla shares to finance the acquisition. Musk is Tesla’s largest shareholder.
On Tuesday, Tesla shares closed down 12%, the biggest single-day drop since September 8, 2020.
On Friday, shares of Tesla, which is based in Austin, Texas, were going for around $884.
Kaiser said selling shares now, instead of closer to when the deal is expected to close, is a “prudent” move by Musk.
Twitter CEO faces employee anger
Twitter chief executive Parag Agrawal sought to quell employee anger on Friday during a company-wide meeting where employees demanded answers to how managers planned to handle an anticipated mass exodus prompted by Elon Musk. The meeting comes after Musk repeatedly criticised Twitter’s content moderation practices and a top executive responsible for setting speech and safety policies.
At the internal town hall meeting, which was heard by Reuters, executives said the company would monitor staff attrition daily, but it was too soon to tell how the buyout deal with Musk would affect staff retention.
Musk has pitched lenders on slashing board and executive salaries but exact cost cuts remain unclear, according to sources familiar with the matter. One source said Musk would not make decisions on job cuts until he assumes ownership of Twitter.
Agrawal answered that Twitter has always cared about its employees and would continue to do so.
“I believe the future Twitter organisation will continue to care about its impact on the world and its customers,” he said.