Tesla CEO Elon Musk, on 26 and 27 April, sold around 4.4 million shares of the electric car company, according to filings with the US Securities and Exchange Commission (SEC).
The shares, amounting to 2.6 percent of his Tesla stake and worth roughly $4 billion, were likely sold to help finance his acquisition of Twitter.
Musk was quick to assure investors that he won't be selling any more Tesla shares, which were already down 12 percent after Twitter agreed to sell itself to him.
There was already speculation that Musk would need to sell some stock to arrange the $21 billion he’s personally guaranteed.
Musk's Financing Package
Even though Elon Musk is the world's richest man – worth nearly $270 billion according to Forbes – most of his wealth is tied up in Tesla, of which he owns about one-fifth.
After spending $2.6 billion on Twitter stock at the beginning of this year, he had only about $3 billion in cash or other relatively liquid assets, according to Bloomberg calculations.
To finance the Twitter deal, worth $44 billion, Musk came up with a fairly detailed $46.5 billion package. He plans to get the money in three ways:
Morgan Stanley and several other financial institutions have “committed to provide $13 billion in financing” to Musk through various types of loans.
He also plans to borrow $12.5 billion by pledging his own shares as collateral – again with the help of Morgan Stanley and others.
Musk has also committed to pay around $21 billion himself.
The problem is, Elon didn't explain how he would get the 21 billion he's personally guaranteed, leading to speculation that he would sell a significant portion of his Tesla stock to fund the deal.
“The Twitter deal is becoming an albatross for Tesla’s stock and this pours gasoline on the raging fire."Dan Ives, Wedbush, to Bloomberg
If we assume that the $4 billion goes towards the Twitter deal, that still leaves $17 billion that Musk will have to come up with.
The billionaire wants to find partners to help share some of the burden and reduce his equity contribution, a person familiar with the matter told Reuters. It is "far from certain" that Musk will find such a partner, the person added.
(With inputs from Reuters, Bloomberg and Forbes)
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