Elon Musk has raised $8.5bn from selling part of his stake in Tesla, boosting his cash position ahead of his planned purchase of Twitter.
The sales were made between Tuesday and Thursday, after Twitter’s board agreed to Musk’s $44bn all-cash takeover approach.
The electric car maker’s share price slumped in the wake of news of the deal, with the drop blamed on concerns about potential share sales by Musk to finance the acquisition, though it also came amid a sharp fall in the wider stock market.
Musk sought to head off worries that the sales would be the start of a spate of divestments, writing on Twitter after the first filings were published on Thursday: “No further TSLA sales planned after today.” Regulatory filings disclosing $4.5bn of the sales came late on Thursday, with the rest early on Friday.
Musk did not say how long he would hold off selling any more Tesla stock, or whether his plans would change in the future, leaving open the question of whether or when he would return to the market to raise more money. The terms of the Twitter deal require him to come up with about $21bn in cash, though it is not expected to close for another six months.
Under the terms of a settlement with securities regulators in 2018, any of Musk’s Twitter messages that could have an impact on Tesla’s share price must be vetted by one of the company’s lawyers. Musk fought to have the settlement overturned in court, but a judge this week ruled against his request.
The sales of almost 9.7mn shares, made at prices ranging from $822 to $999 a share, were the first by the Tesla chief since a burst of selling late last year that raised more than $16bn.
Some of last year’s sales were prompted by a large personal tax bill resulting from the exercise of some of Musk’s stock options in Tesla. He also promised to sell part of his stake after conducting a poll on Twitter about whether he should realise some capital gains in order to pay more tax.
Tesla shares dipped less than one per cent by mid-afternoon New York after a volatile week of trading.
The Twitter deal allows Musk to bring in other backers, potentially leaving him on the hook for only part of the $21bn equity investment he has promised. Despite discussions with private equity groups, however, he has yet to reach an agreement with any other investors.
Musk has also promised to put up part of his Tesla stake as security for a $12.5bn loan to help finance the Twitter acquisition, with banks backing another $13bn of loans that would be taken on by the company itself.