Elon Musk Sold $8.5B in Tesla Stock to Fund Twitter Acquisition

Elon Musk, the new owner of Twitter, disclosed selling 9.6 million Tesla shares worth about $8.5 billion, according to a regulatory filing with the Securities and Exchange Commission (SEC). 

The Tesla and SpaceX CEO sold about 4.4 million shares of his electrical vehicle company on Tuesday and Wednesday, followed by an additional 5.2 million shares on Thursday. After the trades were publicized Thursday night, Musk wrote on Twitter, “No further TSLA sales planned after today.” 

The sale of the 9.6 million shares of stock comes as the Twitter board accepted Musk’s bid to acquire the social media platform for $54.20 per share, which comes out to $44 billion in total. While it is unknown at this time whether or not Musk will use these funds for the purchase, it seems pretty clear that is what is going to happen. 

In order to fund the $44 billion purchase, Musk secured $25.5 billion of fully committed debt, including $12.5 billion in loans against his Tesla stock. Musk himself was going to fund the remainder of the purchase which comes out to about $18.5 billion. Now he has secured a little less than half of that by selling some of his Tesla stock. 

While Musk’s offer was accepted earlier this week, the deal still requires shareholder and regulatory approval. According to the regulatory filing, if Musk cannot secure enough funding to complete the transaction, he would have to pay a termination fee of $1 billion. 

On the other hand, if Musk secures the funds, but Twitter shareholders reject the purchase, Twitter will owe Musk $1 billion according to the same filing. 

After the sale, Musk’s Tesla stake is worth about $147bn and he remains the largest shareholder with a stake of about 15.6%, according to a Guardian report. In addition, while Tesla stock initially dropped 12% after Musk’s sales on Tuesday, they have started to rise again on Friday, with the stock being up 3.56% at the time of writing.

Author: Tyler Irvin

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