WSJ US BusinessElon Musk Sells About $4 Billion in Tesla Stock After Agreeing to Buy Twitter

April 29, 20220
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Elon Musk sold roughly $4 billion worth of Tesla Inc. stock in the two days after agreeing to buy Twitter Inc. for $44 billion, according to regulatory filings made public late Thursday.

The Tesla chief executive reported selling a total of more than 4.4 million shares on Tuesday and Wednesday at prices between around $870 and $1,000 a share, the filings show.

Mr. Musk is Tesla’s largest shareholder and owned roughly 17% of the electric-vehicle maker, or more than 172 million shares, before this week’s sales, according to FactSet.

He is on the hook to come up with $21 billion in cash to finance the Twitter deal. That funding plan also includes borrowing $12.5 billion from loans backed by more than $62.5 billion worth of Tesla shares that he owns. Tesla and several banks have put in place rules that would require him to put up more collateral if the company’s share price falls.

Twitter will become a private company if Elon Musk’s $44 billion takeover bid is approved. The move would allow Musk to make changes to the site. WSJ’s Dan Gallagher explains Musk’s proposed changes and the challenges he might face enacting them. Illustration: Jordan Kranse

Mr. Musk tweeted Thursday: “No further TSLA sales planned after today.”

The Tesla boss didn’t immediately respond to a request for comment about whether he sold shares in the company on Thursday.

Mr. Musk has a net worth of $252 billion, according to the Bloomberg Billionaires Index, making him the world’s richest person. But much of his wealth is tied up in his companies, which include Tesla and Space Exploration Technologies Corp., or SpaceX. Mr. Musk, who is compensated in stock awards and doesn’t accept a cash salary from Tesla, at times has described himself as cash poor.

As of last year, more than half of Mr. Musk’s Tesla stock—or roughly 88 million shares—was pledged as collateral to secure personal debt, an August regulatory filing shows.

Mr. Musk was for many years reluctant to part with Tesla stock. However, he sold more than $16 billion worth last year, much of it to pay taxes due on a large tranche of vested stock options he exercised before they would have expired this year.

Payment Patchwork

Elon Musk is paying for Twitter partly with his own cash, and the rest with a mix of a buyout loan and a loan against his Tesla stock.

Where Mr. Musk is getting $46.5 billion to buy Twitter

$13 billion buyout loan

Morgan

Stanley

$21 billion

$3.5 billion

BNP

Paribas

Bank of

America

Morgan

Stanley

Bank of

America

Credit

Suisse

BNP Paribas

$2 billion

Deutsche

Bank

$12.5 billion margin loan against Tesla

$13 billion buyout loan

Morgan

Stanley

$21 billion

$3.5 billion

BNP

Paribas

Bank of

America

Morgan

Stanley

Bank of

America

Credit

Suisse

BNP Paribas

$2 billion

Deutsche

Bank

$12.5 billion margin loan against Tesla

$13 billion buyout loan

Morgan

Stanley

$21 billion

$3.5 billion

BNP

Paribas

Bank of

America

Morgan

Stanley

Bank of

America

Credit

Suisse

BNP Paribas

$2 billion

Deutsche

Bank

$12.5 billion margin loan against Tesla

$21 billion

$12.5 billion margin

loan against Tesla

$13 billion

buyout loan

Morgan

Stanley

Bank of

America

Morgan

Stanley

$3.5 billion

$2 billion

Bank of

America

Credit

Suisse

Deutsche

Bank

BNP

Paribas

BNP

Paribas

$21 billion

$12.5 billion margin

loan against Tesla

$13 billion

buyout loan

Morgan

Stanley

Bank of

America

Morgan

Stanley

$3.5 billion

$2 billion

Bank of

America

Credit

Suisse

Deutsche

Bank

BNP

Paribas

BNP

Paribas

Selling stock could weaken Mr. Musk’s control over Tesla. Companies such as Facebook parent Meta Platforms Inc. and Google parent Alphabet Inc. have multiple classes of shares, giving founders supervoting power over common shareholders. Tesla lacks such a structure.

In addition to the shares he owns, Mr. Musk has tens of millions of vested Tesla stock options. He is in line to receive billions of dollars worth of additional stock options after the electric-vehicle maker reported record quarterly earnings earlier this month.

Those payouts are part of a massive 2018 pay package that rewards Mr. Musk when Tesla hits certain performance metrics.

Shares in Tesla, the world’s largest car maker by value, are down roughly 19% since the last trading day before Mr. Musk disclosed his Twitter stake.

Write to Rebecca Elliott at rebecca.elliott@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the April 29, 2022, print edition as ‘Musk Sold $4 Billion in Tesla Stock After Twitter Deal.’

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