This week, between Monday and Wednesday, Elon Musk sold $3.5 billion worth of Tesla shares. The movement carried out by the former richest man in the world caused concern among investors. Or rather, it only increased the fear of this group.
Since Musk bought Twitter, Tesla investors have been concerned about the electric car maker’s CEO’s real focus. Stock prices fell in the early days of the new acquisition of “Chief Twit”. Last month, Musk sold 19.5 million shares for nearly $4 billion.
Sales reinforce change of focus and problems on Twitter
Elon Musk claimed that Tesla shareholders benefited from buying Twitter (the “how” he didn’t explain), but investors aren’t very confident in that idea. For this group, the billionaire, CEO and majority shareholder of the manufacturer, is much more focused on his new endeavor — like a child who gets his favorite toy🇧🇷 Of course, let’s not ignore that he needs to make his new
Musk brought Tesla software engineers to review Twitter code in the early days of the purchase. On his account on the social network, the billionaire practically only talks about Twitter, acting as a showcase for SpaceX and Tesla news by retweeting what the companies do.
Through his profile on the platform, Elon Musk informs the next steps of the social network, ideas, asks for opinions and attacks the old management. A brief preview on Musk’s Twitter explains investor concerns about the billionaire’s focus. And of course, stock sales reinforce this idea.
Musk did not disclose the reasons for the sales of Tesla shares (and probably will not say anything), but the main hypothesis is… Twitter. Let’s not ignore that he needs to make his new investment pay off, this is the main point of any entrepreneur when buying a business.
The $13 billion bank loans for the purchase are tied to Twitter, not Musk. However, with billionaire interest and not making a profit, Chief Twit will have to pay the bills out of pocket (or you can file for bankruptcy🇧🇷 Elon Musk’s pocket is called Tesla, so just sell some shares there and that’s it.
The case of the CEO of Tesla is reminiscent of the situation of David Neeleman, founder of Azul, at the beginning of the Covid-19 pandemic. The American had to sell part of his shares to pay off a bank loan – the difference is that his company disclosed the reason in a statement, relieving shareholders and preventing the action from being a withdrawal from the airline industry.
Since April, when it began the process of buying the social network, revealing itself to be a majority shareholder in Twitter, Tesla’s share price has fallen. The manufacturer began the purchase period with a quotation of around US$ 380. Today (15), the value reached US$ 155.31 — a drop of 57% since April.
Another hypothesis for the stock sale is that Musk is protecting himself from a drop in values. Sales began on the same day that the Federal Reserve, the US central bank, raised interest rates by 0.5%. When this happens, there is a downward trend in prices.
In the end, all these factors come into play. However, the latent concern of Tesla investors, added to Musk’s track record, will tip the scales more towards the interpretation that the CEO’s entire focus is on Twitter.
Musk has sold nearly $40 billion worth of stock since 2021
Since November 2021, Elon Musk has sold nearly $40 billion worth of Tesla stock (With another $4 billion he would have bought Twitter in cash). In addition to Twitter and the car manufacturer, the billionaire also owns The Boring Company, Neuralink and SpaceX.
With so much investment, Tesla investors may also be disappointed that Musk opted to buy a new company. Instead, it would make more sense for him to focus on his more solid businesses.
For example, Musk could have surfed the bandwagon of NASA’s Artemis I mission, the first step towards returning humanity to the moon, and used the $27 billion he took out of his own pocket in buying Twitter to develop moon rocket technology — or martians.
With information: TechCrunch and The Verge