Elon Musk has raised $8.5 billion by selling part of his stake in Tesla, boosting his cash position ahead of his planned Twitter purchase.
The sales took place between Tuesday and Thursday, after Twitter’s board approved Musk’s $44 billion all-cash takeover approach.
The electric car maker’s share price slumped following news of the deal, with the drop attributed to concerns over possible share sales by Musk to fund the acquisition, though it also happened amid a sharp decline in the broader stock market.
Trying to allay concerns that the sale would mark the start of a wave of divestments, Musk wrote on Twitter after the initial filings were posted on Thursday: “No further TSLA sales planned after today.” Regulatory filings that revealed $4.5 billion of sales came in late Thursday, the rest early Friday.
Musk didn’t say how long he would wait to sell more Tesla stock or if his plans would change in the future, but left open the question of whether and when he would return to the market to raise more money. The terms of the Twitter deal require him to come up with about $21 billion in cash, though it’s not expected to be finalized within six months.
Under the terms of a 2018 settlement with securities regulators, any Twitter posts from Musk that could affect Tesla’s stock price must be vetted by one of the company’s attorneys. Musk fought in court to overturn the settlement, but a judge ruled against his request this week.
The sale of nearly 9.7 million shares, at prices ranging from $822 to $999 a share, was the first by the Tesla chief since a burst of sales late last year that brought in more than $16 billion.
Some of last year’s sales were prompted by a high personal tax bill resulting from the exercise of some of Musk’s stock options in Tesla. He also pledged to sell some of his stake after polling Twitter on whether he would need to realize some capital gains to pay more taxes.
Shares of Tesla rose 4.7 percent to $918.72 Friday morning after a volatile trading week.
The deal for Twitter allows Musk to bring in other backers, potentially leaving him on the hook for just a portion of the $21 billion equity investment he has pledged. However, despite talks with private equity groups, he has not yet reached an agreement with other investors.
Musk has also pledged to use some of his Tesla stake as security for a $12.5 billion loan to fund the Twitter acquisition, with banks backing an additional $13 billion in loans to be financed by the company itself. entered into.
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