Tesla CEO Elon Musk sold more of his shares in the electric vehicle (EV) business from Monday to Wednesday this week, according to a filing on the US Securities and Exchange Commission (SEC). The reason for the offloading of shares was not disclosed.
Musk sold about 22 million Tesla shares worth $3.6 billion this week, making the transaction the fourth time this year that the billionaire offloaded Tesla stock. In April, Musk sold about $8.5 billion worth of shares, about $6.9 billion in August, and $3.95 billion in November.
Tesla shares were down 2.58% at 10:36 am GST Thursday. Since January this year, the company’s shares fell about 61%.
It wasn’t clear where the proceeds of Musk’s recent shares sale were being spent, but much of it will likely go to his $44 billion acquisition of Twitter. To purchase the social media company, Musk paid for it with his own billions selling Tesla shares, the rest was covered by investment partners and a $13 billion debt.
The social media firm now faces annual interest payments that’s over $1 billion, which could increase even more as interest rates could rise with the market. On Wednesday, Musk tweeted to “beware of debt in turbulent macroeconomic conditions”.
Last week, Musk said using margin loans on any company should be avoided when there are macroeconomic risks involved. His comment came following reports his bankers were considering providing him with new margin loans, backed by Tesla stock that he would be personally responsible for repaying, to replace some of the high-interest debt he layered on Twitter. Stock-backed margin loans are one option for billionaires, whose money is tied up in stocks, to get some cash.
To soften the burden of the $13 billion debt that Musk used to purchase Twitter in October, the Morgan Stanley-led bank group and the billionaire’s advisers have discussed several options, including the margin loans, Bloomberg reported Thursday, citing sources.
It is unclear how one debt to the other would work and how advanced the talks are, Bloomberg further stated, adding that the banks have been unable to find buyers for the Twitter debt and are facing the possibility of incurring steep losses.
