Elon Musk Sold Nearly $7 Billion in TSLA Stock. Here’s Why.

  • Elon Musk sold 7.92 million shares of Tesla (TSLA) worth $6.88 billion.
  • The sales occurred between Aug. 5 and Aug. 9.
  • Shares of TSLA stock are down more than 25% year-to-date.
TSLA stock - Elon Musk Sold Nearly $7 Billion in TSLA Stock. Here’s Why.

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Tesla (NASDAQ:TSLA) is in full focus after it was reported that CEO Elon Musk sold 7.92 million shares worth $6.88 billion. The six Form 4s depicting the trades were released last night on Tesla’s Investor Relations page.

The sale is drawing ire from TSLA investors, as Musk tweeted in late April that he had no further “planned” sales. The Future Fund’s Gary Black explained that “‘planned’ is the lawyer-inserted wiggle word.”

Now, investors are speculating that Musk’s sales will be used to fund a potential Twitter (NYSE:TWTR) acquisition. The legal battle between the Tesla CEO and the social media platform is set to kick off in Delaware’s Chancery court on Oct. 17 and will conclude on October 21.

With that in mind, let’s get into the details of the TSLA stock sale.

Musk Sells $6.88 Billion in TSLA Stock

The sales occurred between Aug. 5 and Aug. 9 and were not enacted via a prearranged 10b5-1 trading plan. After the Aug. 9 sale, Musk still owns 155.03 million shares of TSLA.

The sales are the second time that Musk has sold shares this year. In late April, he sold $8.4 billion worth of TSLA after announcing his intentions to acquire Twitter. After the $6.88 billion sale was disclosed, Musk went on Twitter to answer a few questions from fans. After being asked whether he is now done selling shares, he responded, “Yes. In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.”

Musk did not specify the equity partners he was referring to. He also indicated that if the Twitter deal fell through, he would repurchase shares of TSLA. On top of that, he hinted that he may create his own social media platform if he does not acquire Twitter.

Analysts seem to agree that the sale is a sign that the Twitter acquisition will follow through. Wedbush analyst Dan Ives believes the acquisition is “now more likely” and raised his TWTR stock price target to $50. Gary Black adds that Musk may renegotiate the acquisition price to between $50 and $51 a share.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


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