More than 20 million Tesla shares have been sold by Elon Musk from Monday to Wednesday. According to a regulatory filing, the sale is priced at around $3.5 billion.
This recent move follows the approximately $4 billion worth of shares he sold last month, as per TechCrunch's report.
(Photo : Scott Olson/Getty Images)
SUN VALLEY, ID - JULY 07: Elon Musk, CEO and CTO of SpaceX, CEO and product architect of Tesla Motors, and chairman of SolarCity, attends the Allen & Company Sun Valley Conference on July 7, 2015 in Sun Valley, Idaho.
Why Did Musk Sell Tesla Shares?
The CEO of Tesla, SpaceX, and Twitter did not disclose why he had to sell the EV company's shares. It is worth noting that Musk sold $7 billion worth of stocks in August and another $8.5 billion in April.
Musk now holds Tesla stock valued at over $66 billion following Wednesday's share sale.
The sell-off occurred as Tesla shareholders voiced concerns about Musk's ownership of Twitter, which he recently acquired for $44 billion.
Investors argue that Musk's connection with the social media site is bad for Tesla, and they support their claims by citing the stock price of the company.
The stock of Tesla, which was trading at $156.80 after hours on Wednesday, is down 60.8% from January and is on pace to have its worst annual performance, according to TechCrunch.
According to some analysts, Musk's decision to sell shares may be a response to some of the high-interest debt he is now paying for his Twitter acquisition deal.
As part of the agreement, Twitter took on $13 billion in debt, $3 billion of which was unsecured and has an interest rate of 11.75%.
Additionally, as Tesla's stock price continues to decline, some of the company's most ardent shareholders are pleading with Musk and the board to consider repurchasing shares.
Tesla is expected to conduct a repurchase next year, probably for between $5 billion and $10 billion, according to Musk's statement during the company's Q3 earnings.
The Federal Reserve increased its benchmark interest rate on the same day that Musk announced his most recent stock sell-off, bringing it to a range between 4.25% and 4.5%.
TechCrunch notes that Musk may have been selling in anticipation of Tesla shares losing more value in the upcoming weeks because stock prices frequently decline as interest rates increase.
Musk Loses World's Richest Title
Musk has also recently lost his world's richest person title due to the 50% drop in the value of Tesla shares since the beginning of the year.
2021 was a great year for both Musk and Tesla, with the stock price of Tesla hitting a record high of $407.36 in November and Musk's net worth surpassing $340 billion. But in 2022, things started to go south.
Investor confidence was affected when Musk had to sell some of his Tesla stock to pay for his acquisition and became the CEO of five different companies.
He has experienced the highest decline in fortune this year, according to Bloomberg's Billionaire Index, falling by around $100 billion after achieving $340 billion last year.
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