Tesla CEO Elon Musk sold کا 4.8 billion worth of electric auto maker stock on Tuesday, the day after the Twitter board. Agreed to sell the company. The social media platform is valued at 44 44 billion.
Musk sold 5.3 million shares of Tesla stock at an average price of $ 905.30, according to a filing with the Securities and Exchange Commission on Thursday. The sale represents only 3.1% of Tesla’s shares, which it held entirely as of early Tuesday, and only 2 of Tesla’s total holdings, if the stock options under its control are included. Less than%
The filing did not reveal the reason for the sale, but it appears to be aimed at raising funds for Twitter’s own planned purchase and privatization of the company. In a ___ Tweet After Thursday evening, Musk responded to a question about the sale of the stock with the comment, “There are no further TSLA sales plans after today.” But it was not clear whether this meant that there would be no further sales after Tuesday’s sale, or whether there were additional sales on Wednesday and Thursday, which he has not yet reported.
Insiders of a company, such as Musk, should report the purchase or sale of their company’s stock to the SEC so that the wider investment community can be informed of their activity. But they have a few days to file and still follow the rules.
The sell-off in shares of Tesla was enough to push the stock price down. The number of shares sold so far this year before Tuesday represents 20% of the normal trading value in Tesla shares. And Tesla shares lost 12.2% of their value during trading on Tuesday, the biggest one-day loss since September 2020. The volume of trades the day before.
Tesla investors could also sell shares this week due to this concern. Musk will not be able to give Tesla so much time and attention.There are exciting development plans, and growing competition from traditional carmakers who are spending billions on offering their electric vehicles.
Musk is expected to use his massive Tesla Holdings, which has made him the richest man on the planet, to finance Twitter’s acquisition, but that doesn’t mean much. It does not necessarily mean that it needs to sell all the shares it needs to accumulate. Full purchase price. Instead, he could use the shares as collateral for loans. Deposit cash.
But there is a limit to how much money he can raise by mortgaging his Tesla shares as collateral. He could raise more money by selling some of his Tesla shares. Tesla’s corporate rules state that the company’s officers and directors can only increase the value of the stock by 25% as collateral.
As of June 30, 2021, the company’s filing shows that it had already mortgaged 88.3 million shares of its Tesla as collateral, but those shares were mortgaged years ago when the price of Tesla’s shares reached their current level. The price was a small fraction. He may be able to borrow even more money against some of these shares. And an estimated 79 million unallocated shares held after Tuesday’s sale could be used to borrow 17 17 billion, even after a recent drop in Tesla’s share price.